What is the impact of a government budget deficit on public savings and the supply of loanable funds?

• A. It decreases public savings and increases the supply of loanable funds.
• B. It decreases public savings and decreases the supply of loanable funds.
• C. It increases public savings and decreases the supply of loanable funds.
• D. It increases public savings and increases the supply of loanable funds.

Answer: (B)