Figure 32-4 Refer to the following diagram of the open- economy macroeconomic model to answer the questions that follow. REAL INTEREST RATE a to b. b to a. a to c. Graph (a) Od to a. с A b Refer to Figure 32-4. The initial effect of an increase in the budget deficit in the loanable funds market shown in graph (a) can be illustrated as a move from S₁ S₂ QUANTITY OF LOANABLE FUNDS REAL EXCHANGE RATE REAL INTEREST RATE 1.50 1.25 1.00 0.75 0.50 Graph (b) NCO NET CAPITAL OUTFLOW Graph (c) D₁ D₂ S₁ S₂ S₂ QUANTITY OF DOLLARS

Figure 32-4 Refer to the following diagram of the open- economy macroeconomic model to answer the questions that follow. REAL INTEREST RATE a to b. b to a. a to c. Graph (a) Od to a. с A b Refer to Figure 32-4. The initial effect of an increase in the budget deficit in the loanable funds market shown in graph (a) can be illustrated as a move from S₁ S₂ QUANTITY OF LOANABLE FUNDS REAL EXCHANGE RATE REAL INTEREST RATE 1.50 1.25 1.00 0.75 0.50 Graph (b) NCO NET CAPITAL OUTFLOW Graph (c) D₁ D₂ S₁ S₂ S₂ QUANTITY OF DOLLARS

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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