Federal and state governments will reduce deficit spending, Macroeconomics

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Federal and state governments will reduce deficit spending

Federal and state governments will reduce deficit spending by 1.8 trillion this fiscal year. This action will cause which of the following to occur?

A) Bond demand decreases and loanable funds supply increases

B) Bond demand decreases and loanable funds supply decreases

C) Bond demand increases and loanable funds supply decreases

D) Bond prices increase and interest rates decrease

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Macroeconomics: Federal and state governments will reduce deficit spending

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