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- https://socialsci.libretexts.org/Bookshelves/Economics/Economics_-_Theory_Through_Applications/29%3A_Balancing_the_Budget/29.05%3A_The_Costs_of_DeficitsWe now turn to the costs of deficit spending. (Although we refer to this as “deficit spending,” the same arguments apply if we analyze the effects of a reduction in the government surplus.) First, we ...We now turn to the costs of deficit spending. (Although we refer to this as “deficit spending,” the same arguments apply if we analyze the effects of a reduction in the government surplus.) First, we need to understand what happens in the financial sector of the economy if the government runs a deficit. In the case of the government sector earlier in the chapter, the balance of these flows is another way of saying that the government must satisfy its budget constraint.
- https://socialsci.libretexts.org/Bookshelves/Economics/Economics_-_Theory_Through_Applications/08%3A_Why_Do_Prices_Change/8.05%3A_Three_Important_MarketsIf the US federal government borrows more, this shifts the demand for credit outward and increases the interest rate. (The government is such a big player in this market that its actions affect the in...If the US federal government borrows more, this shifts the demand for credit outward and increases the interest rate. (The government is such a big player in this market that its actions affect the interest rate.) The monetary authority, meanwhile, buys and sells in credit markets to influence the real interest rate in the economy.The actions of the Federal Reserve and other monetary authorities are studied in detail in macroeconomics courses.
- https://socialsci.libretexts.org/Bookshelves/Economics/Economics_-_Theory_Through_Applications/31%3A_Toolkit/31.07%3A_New_PageIn particular, individual loan supply is upward sloping: when the real interest rate increases, a typical household will supply a greater quantity of funds to the credit market. Borrowers and lenders ...In particular, individual loan supply is upward sloping: when the real interest rate increases, a typical household will supply a greater quantity of funds to the credit market. Borrowers and lenders interact in the credit market (or loan market), which is illustrated in Figure \PageIndex4. Credit market equilibrium occurs at the real interest rate where the quantity of loans supplied equals the quantity of loans demanded.
- https://socialsci.libretexts.org/Courses/Diablo_Valley_College/Econ_101%3A_Economics_of_Public_Issues_(Sorce)/14%3A_Taxation_and_the_Public_Budget/14.05%3A_Balancing_the_Budget/14.5.05%3A_The_Costs_of_DeficitsWe now turn to the costs of deficit spending. (Although we refer to this as “deficit spending,” the same arguments apply if we analyze the effects of a reduction in the government surplus.) First, we ...We now turn to the costs of deficit spending. (Although we refer to this as “deficit spending,” the same arguments apply if we analyze the effects of a reduction in the government surplus.) First, we need to understand what happens in the financial sector of the economy if the government runs a deficit. In the case of the government sector earlier in the chapter, the balance of these flows is another way of saying that the government must satisfy its budget constraint.
