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Use the following information on Country Z, a closed economy, for problems 8 &. 9. T stands for Actual and potential output {GDP or Y) $18.01" Government purchases (G) 4.0T Net taxes (T) 2 51' Private saving and investment behavior in Country Z can be represented as follows: Real Private Savings (5] Real Private Investment {1) Interest Interest rate . rate . . . . 11% - 11% -:- 10% 10% -:- 9% 9% --.- 8% 6% - 7% 7% - 6% 6% - 5% 5% - 4% . 4% -. 3% "i 3% "i': : : 2% 2% 1% 1% 0% 0% 0.0 1.0 2.0 3.0 4.0 5.0 6.0 0.0 1.0 2.0 3.0 4.0 5.0 6.0 ?.0 Trillicns 0.5 1.5 2.5 3.5 4.5 5.5 0.5 1.5 2.5 3.5 4.5 5.5 6.5 5.5 ofDollarS per'rear Both \"curves\" are straight lines. You might find graph paper useful for working the problems. 9. a) Draw the government:s demand for or supply of loanable funds. b) Draw the supply and demand curves for the loanable funds market. c) What is the equilibrium real interest rate? d) What is the value of annual private savings? e) What is the value of annual private investment? D What is the value of annual consumption? 10. Suppose Country Z's government increases its spending by $15T but leaves net taxes unchanged. Answer the following questions about the longrun impact of this change in scal policy. a) Draw the supply and demand curves for the loanable funds market. b) What is the new equilibrium real interest rate? c) What is the new value of annual private savings? d) What is the new value of annual private investment? e) What is the new value of annual consumption