Fill in the blanks to make the following statements correct. a. The economy's equilibrium interest rate is
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a. The economy's equilibrium interest rate is determined where ______. At an interest rate above the equilibrium interest rate, the quantity of capital supplied ______ the quantity of capital demanded, and the result is an ______ in the interest rate.
b. At an interest rate below the equilibrium interest rate, the quantity of capital demanded ______ the quantity of capital supplied, and the result is an______ in the interest rate.
c. Beginning in equilibrium in the capital market, an increase in the supply of financial capital leads to an ______ in the equilibrium interest rate, an ______ in borrowing by firms, and an ______ in the equilibrium level of investment and saving.
d. Beginning in equilibrium in the capital market, an increase in the demand for financial capital leads to an ______ in the equilibrium interest rate, an ______ in desired saving by households, and an ______ in the equilibrium level of investment and saving.
e. Technological improvements lead to an ______ in both the demand for and the supply of financial capital. As a result, technological improvements can explain an ______ capital stock and ______ in the interest rate.
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Related Book For
Microeconomics
ISBN: 978-0321866349
14th canadian Edition
Authors: Christopher T.S. Ragan, Richard G Lipsey
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