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Suppose the government now raises its spending by $5 billion and reduces tax revenues by $5 billion. Household and firm demand and supply for credit

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Suppose the government now raises its spending by $5 billion and reduces tax revenues by $5 billion. Household and firm demand and supply for credit at each interest rate remain the same. What will the new equilibrium interest rate be?

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Interest Quantity of Credit Quantity of Credit Rate (%) Demanded (billion $) Supplied (billion $) 2 5 4 10 6 15 8 20 10 25 12 30 14 35

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