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Table 4 Loanable funds Loanable funds Real demanded supplied interest rate (trillions of 2002 (trillions of 2002 (percent per year) dollars) dollars) 7.0 7.0 6.5

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Table 4 Loanable funds Loanable funds Real demanded supplied interest rate (trillions of 2002 (trillions of 2002 (percent per year) dollars) dollars) 7.0 7.0 6.5 7.5 6.0 8.0 5.5 8.5 5.0 9.0 4.5 9.5 4.0 10.0 9) Refer to Table 4. The table shows an economy's demand for loanable funds schedule and the private supply of loanable funds schedule when the government's budget is balanced. If the government budget deficit is $1.0 trillion, the real interest rate is percent a year, the quantity of investment is trillion, and the quantity of private saving is trillion. A) 7: $8.5; $5.5 B) 5: $7.5; 56.5 C) 3: $6.5; $7.0 D) 7: $5.5; $8.5 E) 5; $6.5; $7.5

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