1. The market for loanable funds is in equilibrium. All else equal, the federal deficit is growing. Describe how this will affect the market for loanable funds, the equilibrium interest rate, and the equilibrium quantity of loanable funds.

2. How can autonomous consumption be greater than zero when disposable income equals zero?

3. Suppose the economy is in income-expenditure equilibrium. How will each of the following situations affect planned investment and unplanned inventory investment? a. The Federal Reserve decreases interest rates. b. Major economic indicators decrease business optimism about growth in real GDP.