Final answer:
A higher budget deficit would be represented graphically by a movement to the right along the supply curve for loanable funds.
Step-by-step explanation:
The higher budget deficit would be represented graphically by a movement to the right along the supply curve for loanable funds (Option C). An increase in government borrowing increases the demand for financial capital, which shifts the demand curve to the right. As a result, the equilibrium interest rate increases, leading to higher interest rates.