Which of the following statements about the loanable funds market is accurate?

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A reduction in the government budget deficit causes the real interest rate to rise.An increase in the government budget deficit causes the supply of loanable funds to shift rightward.A rise in private savings results in a leftward shift of the loanable funds supply.An increase in the government budget deficit leads to a leftward shift in the supply of loanable funds.

Explanation

When the government budget deficit grows, it reduces the amount of funds available for private borrowing, causing the supply of loanable funds to shift left. This contrasts with statements suggesting the supply shifts right or that savings changes cause a leftward shift.