If the Indian government reduces its deficit and returns to a balanced budget, how will the demand

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If the Indian government reduces its deficit and returns to a balanced budget, how will the demand for or supply of loanable funds in India change?


At the start of 2008, India had an annual growth of 9 percent, huge consumer demand, and increasing investment. But by July 2008, India had large government deficits and rising interest rates. Economic growth is expected to fall to 7 percent by the end of 2008. A Goldman Sachs report suggests that India needs to lower the government’s deficit and raise educational achievement.

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