In the graph you've just made, what is the level of private saving when the government has a $1 trillion budget deficit? A. $2.5 trillion B. $2.0 trillion C. $1.5 trillionThanks!Screenshot attached <The real interest rate risesand the equilibrium quantityof loanable funds increases.Private saving increases,but investment decreases.ResetReal interest rate (percent per year)12Government deficitincreases demand100062Real interestrate risesInvestmentdecreases1.01.5PDLFPrivate savingincreasesSLFDLF2.02.53.03.5Loanable funds (trillions of 2012 dollars)

Private savings is that amount of income which is left for consumption after taxes. Private savings…

Answered: In the graph you've just made, what is…

In the graph you've just made, what is the level of private saving when the government has a $1 trillion budget deficit? A. $2.5 trillion B. $2.0 trillion C. $1.5 trillion Thanks! Screenshot attached

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Concept explainers

Public Saving

Public saving deals with the amount which has been in excess after meeting all the obligatory expenses and investment of the government. Taxes are collected by the government to meet its day-to-day expenditures. The obligatory expenses include all those expenses which are mandatory for the government. It cannot be avoided as it is inevitable.

Question

In the graph you've just made, what is the level of private saving when the government has a $1 trillion budget deficit? A. $2.5 trillion B. $2.0 trillion C. $1.5 trillion

Thanks!

Screenshot attached

<
The real interest rate rises
and the equilibrium quantity
of loanable funds increases.
Private saving increases,
but investment decreases.
Reset
Real interest rate (percent per year)
12
Government deficit
increases demand
10
00
6
2
Real interest
rate rises
Investment
decreases
1.0
1.5
PDLF
Private saving
increases
SLF
DLF
2.0
2.5
3.0
3.5
Loanable funds (trillions of 2012 dollars)

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