The table shows an economy's demand for loanable funds and supply of loanable funds schedules when the government's budget is balanced. The quantity of loanable funds demanded increases by $1.0 trillion at each real interest rate and the quantity of loanable funds supplied increases by $2.0 trillion at each interest rate. If, at the same time the government budget becomes a deficit of $1.0 trillion, what are the real interest rate, the quantity of loanable funds, investment, and saving? The real interest rate is percent a year. Real interest rate (percent per year) 456789 10 Loanable funds Loanable fund supplied demanded (trillions of 2012 dollars per year) 8.0 7.5 7.0 6.5 6.0 5.5 5.0 6.0 6.5 7.0 7.5 8.0 8.5 9.0

The table shows an economy's demand for loanable funds and supply of loanable funds schedules when the government's budget is balanced. The quantity of loanable funds demanded increases by $1.0 trillion at each real interest rate and the quantity of loanable funds supplied increases by $2.0 trillion at each interest rate. If, at the same time the government budget becomes a deficit of $1.0 trillion, what are the real interest rate, the quantity of loanable funds, investment, and saving? The real interest rate is percent a year. Real interest rate (percent per year) 456789 10 Loanable funds Loanable fund supplied demanded (trillions of 2012 dollars per year) 8.0 7.5 7.0 6.5 6.0 5.5 5.0 6.0 6.5 7.0 7.5 8.0 8.5 9.0

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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