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Real interest rate (percent per year) 4 5 6 The table shows the demand for loanable funds schedule and the supply of loanable funds schedule
Real interest rate (percent per year) 4 5 6 The table shows the demand for loanable funds schedule and the supply of loanable funds schedule when the government budget is balanced. If the goverment budget deficit is $2.0 trillion, what are the real interest rate, the quantity of investment, and the quantity of private saving? Is there any crowding out in this situation? If the government budget deficit is $2.0 trillion, the real interest rate is percent a year If the goverment budget deficit is $2.0 trillion, the quantity of investment is $] trillion, and the quantity of private saving is $.trillion. Is there any crowding out in this situation? O A Yes. The deficit increases the real interest rate, which decreases investment. OB. No. Investment is $6.5 trillion, which means that it is not being crowded Loanable funds Loanable funds demanded supplied (trillions of 2009 dollars per year) 8.0 7.0 7.5 7.5 8.0 6.5 8.5 6.0 9.0 5.5 5.0 10.0 8 9 10 9.5 out Real interest rate (percent per year) 4 5 6 The table shows the demand for loanable funds schedule and the supply of loanable funds schedule when the government budget is balanced. If the goverment budget deficit is $2.0 trillion, what are the real interest rate, the quantity of investment, and the quantity of private saving? Is there any crowding out in this situation? If the government budget deficit is $2.0 trillion, the real interest rate is percent a year If the goverment budget deficit is $2.0 trillion, the quantity of investment is $] trillion, and the quantity of private saving is $.trillion. Is there any crowding out in this situation? O A Yes. The deficit increases the real interest rate, which decreases investment. OB. No. Investment is $6.5 trillion, which means that it is not being crowded Loanable funds Loanable funds demanded supplied (trillions of 2009 dollars per year) 8.0 7.0 7.5 7.5 8.0 6.5 8.5 6.0 9.0 5.5 5.0 10.0 8 9 10 9.5 out
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