2) The government a. sets most interest rates. b. is a net lender (or supplier of loanable funds). c. is a net borrower (or demander of loanable funds). d. determines the "federal risk premium" portion of commercial interest rates
Social Studies · High School · Tue Nov 03 2020
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In the context of the options provided:
c. is a net borrower (or demander of loanable funds).
This statement refers to the government's position as a borrower in the loanable funds market. The government borrows funds from various sources, including issuing bonds, to finance its activities when expenditures exceed revenues.