If government spending and tax collections both increase by the same a

If government spending and tax collections both increase by the same amount, then according to the classical loanable funds market:

a. the demand for loanable funds will increase and the interest rate will rise.
b. the demand for loanable funds will fall and the interest rate will rise.
c. savings will rise and interest rates will fall.
d. nothing will shift and the interest rate will remain constant.
e. none of the above.

ANSWER

B