When the government is running a budget surplus athe supply

When the government is running a budget surplus,

a.the supply of loanable funds includes only business investment spending

b,the demand for loanable funds includes only business investment spending

c.the demand for loanable funds includes government spending and business investment spending

d.the supply of loanable funds includes only household saving

Solution

When government is running budget surplus, then government revenue is more than government expenditure.

It means government does not need loanable fund for financing it\'s expenditure because government expenditure is less than income of government.

It means the demand for loanable funnds includes only business investment spending.

Hence option b is the correct answer.