Assume a constant supply of loanable funds. When government defi cit spending leads to increases in the demand for loanable funds, do interest rates always rise? Explain. (Hint: Consider the role of...

Assume a constant supply of loanable funds. When government defi cit spending leads to increases in the demand for loanable funds, do interest rates always rise? Explain. (Hint: Consider the role of expectations.)

Distinguish between public debt and a defi cit.