If the government increases its borrowing, then at every interest rate there is a(n) funds. additional demand for increase in the supply of additional supply of decrease in the supply of

additional demand for funds.

Explanation: If there is an increase in borrowing by the government, this means that at every interest rate, the government makes additional demand for funds.

A lot of reasons can be attributed to an increase in government's borrowing. Government may borrow as a way to pay back existing loans or provision of infrastructure such as schools, roads, hospitals for its people. In a case when government's borrowing rises, the government will demand for money at different interest rates.

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