Exhibit: Saving, Investment, and the Interest Rate 1 Real | Saving, S The economy begins in equilibrium at point E , representing the real interest rate r_1 at which saving S_1 equals desired investment I_1. What will be the new equilibrium combination of real interest rate, saving, and investment if the government cuts spending, holding other factors constant? a. point A b. point D c. point C d. point B

Exhibit: Saving, Investment, and the Interest Rate 1 Real | Saving, S The economy begins in equilibrium at point E , representing the real interest rate r_1 at which saving S_1 equals desired investment I_1. What will be the new equilibrium combination of real interest rate, saving, and investment if the government cuts spending, holding other factors constant? a. point A b. point D c. point C d. point B

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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