Chapter8: The Keynesian Model
Section: Chapter Questions
Problem 6SQP
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answer choices: increase/staythesame/decrease
![A political shift in the United States has led the Federal government to begin an austerity program.
On the following graph, illustrate the effect austerity will have on the interest rate and the quantity of savings in the market for loanable funds.
Note: Select and drag one or both of the curves to the desired position. Curves will snap into position, so if you try to move a curve and it
snaps back to its original position, just drag it a little farther.
INTEREST RATE
Supply
Demand
QUANTITY OF LOANABLE FUNDS
Based on your previous answer, the long-run capital stock will
standards of living will
Demand
0
Supply
?
, productivity will
and the](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F0b1c1217-3ca9-48af-b155-11a2efe4ee10%2F252ab770-a1e1-44dd-ae21-5da19cb8ef17%2Fyu9j9kf_processed.png&w=3840&q=75)
Transcribed Image Text:A political shift in the United States has led the Federal government to begin an austerity program.
On the following graph, illustrate the effect austerity will have on the interest rate and the quantity of savings in the market for loanable funds.
Note: Select and drag one or both of the curves to the desired position. Curves will snap into position, so if you try to move a curve and it
snaps back to its original position, just drag it a little farther.
INTEREST RATE
Supply
Demand
QUANTITY OF LOANABLE FUNDS
Based on your previous answer, the long-run capital stock will
standards of living will
Demand
0
Supply
?
, productivity will
and the
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