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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

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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 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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