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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
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?
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 35Step by Step Solution
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