12. The budget and a virtuous circle which of the following describes a 'virtuous circle' in the context of the government budget? 0 A bud get surplus shifts the supplv of loanable funds to the left; interest rates fall: economic growth increases; government spending on income support falls 0 A budget decit shifts the supply of loanable funds to the left; interest rates rise; investment and growth fall; tax revenue declines O A budget decit increases the supply of loanahle funds, raising interest rates, boosting economic growth, reducing government spending on income support 0 A bud get surplus contributes to the supply of loanable funds. boosting investment and increasing tax revenues