Suppose a hypothetical open economy uses the U.S. dollar as currency. The table below presents data describing the relationship between differen real interest rates and this economy's levels of national saving, domestic investment, and net capital outflow. Assume that the economy is current operating under a balanced government budget. Real Interest Rate (Percent) 7 6 4425 3 National Saving (Billions of dollars) 45 40 35 30 25 20 Domestic Investment (Billions of dollars) 20 30 Market for Loanable Funds 40 50 60 70 Net Capital Outflow (Billions of dollars) -15 -10 -5 0 5 10 Given the information in the table above, use the blue points (circle symbol) to plot the demand for loanable funds. Next, use the orange points (square symbol) to plot the supply of loanable funds. Finally, use the black point (cross symbol) to indicate the equilibrium in this market. (?)
Suppose a hypothetical open economy uses the U.S. dollar as currency. The table below presents data describing the relationship between differen real interest rates and this economy's levels of national saving, domestic investment, and net capital outflow. Assume that the economy is current operating under a balanced government budget. Real Interest Rate (Percent) 7 6 4425 3 National Saving (Billions of dollars) 45 40 35 30 25 20 Domestic Investment (Billions of dollars) 20 30 Market for Loanable Funds 40 50 60 70 Net Capital Outflow (Billions of dollars) -15 -10 -5 0 5 10 Given the information in the table above, use the blue points (circle symbol) to plot the demand for loanable funds. Next, use the orange points (square symbol) to plot the supply of loanable funds. Finally, use the black point (cross symbol) to indicate the equilibrium in this market. (?)
Chapter21: Financial Markets, Saving, And Investment
Section: Chapter Questions
Problem 9P
Related questions
Question
![REAL INTEREST RATE
10
8
0
0
20
Market for Loanable Funds
60
40
QUANTITY OF LOANABLE FUNDS
80
100
Demand
Supply
Equilibrium
On the following graph, plot the relationship between the real interest rate and net capital outflow by using the green points (triangle symbol) to plot
the points from the initial data table. Then use the black point (X symbol) to indicate the level of net capital outflow at the equilibrium real interest
rate you derived in the previous graph.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F220eed70-1154-4fb9-a08e-8184afa41c7e%2F0c9f29c6-5fc2-4541-941c-d9b40461577e%2Fm3zyios_processed.jpeg&w=3840&q=75)
Transcribed Image Text:REAL INTEREST RATE
10
8
0
0
20
Market for Loanable Funds
60
40
QUANTITY OF LOANABLE FUNDS
80
100
Demand
Supply
Equilibrium
On the following graph, plot the relationship between the real interest rate and net capital outflow by using the green points (triangle symbol) to plot
the points from the initial data table. Then use the black point (X symbol) to indicate the level of net capital outflow at the equilibrium real interest
rate you derived in the previous graph.
![Suppose a hypothetical open economy uses the U.S. dollar as currency. The table below presents data describing the relationship between different
real interest rates and this economy's levels of national saving, domestic investment, and net capital outflow. Assume that the economy is currently
operating under a balanced government budget.
Real Interest Rate
(Percent)
7
6
5
4
3
Сл
2
National Saving
(Billions of dollars)
45
40
35
30
25
20
Domestic Investment
(Billions of dollars)
20
30
40
50
60
70
Market for Loanable Funds
Net Capital Outflow
(Billions of dollars)
-15
-10
-5
0
5
10
Given the information in the table above, use the blue points (circle symbol) to plot the demand for loanable funds. Next, use the orange points
(square symbol) to plot the supply of loanable funds. Finally, use the black point (cross symbol) to indicate the equilibrium in this market.
(?)](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F220eed70-1154-4fb9-a08e-8184afa41c7e%2F0c9f29c6-5fc2-4541-941c-d9b40461577e%2Fn4zfev_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Suppose a hypothetical open economy uses the U.S. dollar as currency. The table below presents data describing the relationship between different
real interest rates and this economy's levels of national saving, domestic investment, and net capital outflow. Assume that the economy is currently
operating under a balanced government budget.
Real Interest Rate
(Percent)
7
6
5
4
3
Сл
2
National Saving
(Billions of dollars)
45
40
35
30
25
20
Domestic Investment
(Billions of dollars)
20
30
40
50
60
70
Market for Loanable Funds
Net Capital Outflow
(Billions of dollars)
-15
-10
-5
0
5
10
Given the information in the table above, use the blue points (circle symbol) to plot the demand for loanable funds. Next, use the orange points
(square symbol) to plot the supply of loanable funds. Finally, use the black point (cross symbol) to indicate the equilibrium in this market.
(?)
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