7. Suppose that you have an economy where the government does not have a deficit and the demand for loanable funds and supply of loanable funds are as follows (ifr = 0.2, it is an interest rate of 20%): Demand: r = 0.2 - 0.0001Q Supply: r = 0.0001Q a. Graph the demand and supply of loanable funds b. What is the equilibrium interest rate and equilibrium quantity in the market? Interest rate: Quantity: c. Now the government has a budget deficit that causes the supply of loanable funds to change to r = 0.01 + 0.0001Q. What is the new equilibrium interest rate and quantity? Interest rate: Quantity: d. Is there crowding out in this economy with the new deficit? If so, calculate the amount that private investment is being crowded out and explain why it is happening. Crowding out: 6