Suppose that initially the government has a budget deficit (i.e. G - T > 0) and is financing the deficit by issuing bonds (e.g. borrowing). The government then decides to eliminate the budget deficit (i.e. now G - T = 0) by decreasing government expenditure G while leavings net taxes T unchanged. In other words, the government is now no longer borrowing. Using the classical loanable funds theory, explain the effects of this decrease in government spending. Specifically, demonstrate the impact of this policy on equilibrium interest rates, savings, consumption, investment, aggregate demand and output.