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a) What is a government budget deficit? How does it affect interest rates, investment and economic growth? Use the loanable funds market diagram and explain

a)What is a government budget deficit? How does it affect interest rates, investment and economic growth? Use the loanable funds market diagram and explain using three steps method. Define crowding out and explain on the diagram and in words how it happens.

b.Define the overnight rate? Explain how changing the overnight rate affects the money supply in the economy.

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