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The table sets out the data for an economy when the government's budget is balanced. Real interest rate Loanable funds Loanable funds If the government's
The table sets out the data for an economy when the government's budget is balanced. Real interest rate Loanable funds Loanable funds If the government's budget becomes a deficit of $2.0 billion (percent demanded supplied and the Ricardo-Barro effect occurs, what are the real per year) (billions of 2007 dollars) interest rate and investment? 7.0 5.0 6.5 . . . 5.5 6.0 6.0 5.5 If the Ricardo-Barro effect occurs, and if the government's 6.5 budget becomes a deficit of $2.0 billion, the real interest 5.0 7.0 rate is percent a year and the quantity of investment is 4.5 7.5 4.0 $ billion . 8.0 > >> Answer to 1 decimal place
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