Refer to the Table Below to Answer the Following Question

question 87

Multiple Choice

Refer to the table below to answer the following question.
Table 7.3.2
-Table 7.3.2 shows an economy's demand for loanable funds and supply of loanable funds schedules when the government's budget is balanced.The quantity of loanable funds demanded increases by $1 trillion at each real interest rate and the quantity of loanable funds supplied increases by $2 trillion at each real interest rate.If the government wants investment to be $9 trillion, it must _______ its budget balance by _______ trillion.

• A)increase; $1
• B)increase; $1.5
• C)decrease; $1
• D)increase; $2
• E)decrease; $1.5

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Definitions:

Weekly Disbursements

Refers to payments made by a business on a weekly basis, potentially including payroll, supplier payments, or other operational expenses.

Interest Rate

The fee, represented as a proportion of the principal amount, that a lender imposes on a borrower for the utilization of assets.

Initial Cash Balance

The amount of cash a company has at the beginning of a specific accounting period.

Weekly Disbursements

The process of distributing funds or payments on a weekly basis.