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The table sets out data for an economy when the government's budget is balanced. Loanable funds Loanable funds Real interest rate demanded supplied (percent per
The table sets out data for an economy when the government's budget is balanced. Loanable funds Loanable funds Real interest rate demanded supplied (percent per year) (trillions of 2009 dollars) 8.5 5.5 8.0 6.0 7.5 6.5 7.0 7.0 6.5 7.5 6.0 8.0 5.5 85 The government of Bedrock's budget becomes a deficit of $1 trillion and the Ricardo-Barro effect occurs. What are the real interest rate and the investment
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