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The table shows the demand for loanable funds schedule and the supply of loanable funds schedule when the government budget is balanced. If the government
The table shows the demand for loanable funds schedule and the supply of loanable funds schedule when the government budget is balanced. If the government budget decit is $2.0 trillion and the Ricardo-Barro effect occurs, what are the real interest rate and the quantity of investment? E} If the Ricardo-Barro effect occurs. and if the government budget decit is $2.0 trillion, the real interest rate is D percent a year and the quantity of investment is $|:| trillion. Is there any crowding out in this situation? {32- A. Yes. Investment is $6.5 trillion but private saving is $8.5 trillion, which means that investment is decreased by the amount of the government deficit. {:1- B. No. Crowding out does not occur because government dissaving does not inuence the real interest rate. The table shows the demand for loanable funds schedule and the supply of loanable funds schedule when the government budget is balanced. Real Loanable funds Loanable funds interest rate demanded supplied If the government budget decit is $2.0 trillion and the Ricardo-Barre effect occurs, what are the real interest rate and the (percent millions of 2012 dollars quantity of investment? per year) per year) 4 8.5 4.5 5 8.0 5.0 6 7.5 5.5 If the RicardoBarro effect occurs, and if the government budget decit is $2.0 trillion, the real interest rate is percent a 7 7_0 6.0 year and the quantity of investment is $ trillion. 8 6.5 6.5 9 6.0 7.0 Is there any crowding out in this situation? 10 55 7'5 {.3 A. Yes. Investment is $6.5 trillion but private saving is $8.5 trillion. which means that investment is decreased by the amount of the government deficit. Q B. No. Crowding out does not occur because government dissaving does not inuence the real interest rate. The Bureau of Economic Analysis reported that the U.S. capital stock was $49.6 trillion at the end of 2012, $51.2 trillion at the end of 2013, and $53.6 trillion at the end of 2014. Depreciation in 2013 was $1.6 trillion, and gross investment during 2014 was $2.4 trillion. Calculate U.S. net investment and gross investment during 2013. >>> Answer to 1 decimal place. U.S. net investment during 2013 was $l: trillion. U.S. gross investment during 2013 was $3 trillion
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