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The following information describes the loanable funds market in equilibrium at a real interest rate of 4%. Values are in billions. Real Interest Rate (%)
The following information describes the loanable funds market in equilibrium at a real interest rate of 4%. Values are in billions. Real Interest Rate (%) Quantity of loanable funds supplied ($) Quantity of loanable funds demanded ($) 6 1300 700 5 1200 800 4 1000 1000 3 800 1200 2 600 1500 If the government simultaneously increases its budget deficit by $300 billion and enacts an investment tax credit of $300 billion the equilibrium interest will remain unchanged at 4%.
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