Manipulate the graph to show what will happen to supply and demand in the market for loanable funds when the government budget deficit increases, changing the equilibrium quantity of loanable funds by 3 percentage points. Ceteris paribus, what is the new interest rate? interest rate: 6 Ceteris paribus, private investment would decrease. O not change. O increase. % Interest rate (%) 10 9 8 7 6 5 3 2 1 0 0 2 4 Supply 0 Demand 6 8 10 12 14 16 18 20 22 24 26 28 Quantity of loanable funds (% of GDP)
Manipulate the graph to show what will happen to supply and demand in the market for loanable funds when the government budget deficit increases, changing the equilibrium quantity of loanable funds by 3 percentage points. Ceteris paribus, what is the new interest rate? interest rate: 6 Ceteris paribus, private investment would decrease. O not change. O increase. % Interest rate (%) 10 9 8 7 6 5 3 2 1 0 0 2 4 Supply 0 Demand 6 8 10 12 14 16 18 20 22 24 26 28 Quantity of loanable funds (% of GDP)
Chapter21: Financial Markets, Saving, And Investment
Section: Chapter Questions
Problem 9P
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