(b)Assumed that the government maintained a balanced budget initially. However, the financial secretary underestimated the recovery of...
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Question:
(b)Assumed that the government maintained a balanced budget initially. However, the financial secretary underestimated the recovery of local economy and the budget surplus is resulted.How does the budget surplus affect the loanable fund market? How does this market restore the equilibrium? How is the 'private sector spending' affected by the 'public sector spending'? Explain and illustrate with a well-labelled diagram.
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