Canadian Budget Deficit Narrows The deficit in the first 10 months of the year from April 2013 to January 2014 totalled $10.54 billion, down from $13.87 billion in the same period a year earlier. a....

Canadian Budget Deficit Narrows

The deficit in the first 10 months of the year

from April 2013 to January 2014 totalled $10.54

billion, down from $13.87 billion in the same

period a year earlier.

a. Explain the effect of the decrease in the budget

deficit on the loanable funds market.

b. What effect does the smaller budget deficit

have on the real interest rate, private saving,

and investment?

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