9. Use the information in Problem 4.

a. U.S. household income has grown considerably since 1984. Has U.S. saving been on a downward trend because Americans feel wealthier?

b. Explain why households preferred to buy corporate equities rather than bonds.

Use the following table to work Problems 10 to 12. The table shows an economy’s demand for loanable funds and the supply of loanable funds schedules, when the government’s budget is balanced. Real Loanable Loanable interest funds funds rate demanded supplied (percent per year) (trillions of 2005 dollars) 4 8.5 5.5 5 8.0 6.0 6 7.5 6.5 7 7.0 7.0 8 6.5 7.5 9 6.0 8.0 10 5.5 8.5