-The Above Table Has the Private Demand for Loanable Funds

question 37

Multiple Choice

-The above table has the private demand for loanable funds and the private supply of loanable funds schedules. If the government budget surplus is $200 billion, and there is no Ricardo-Barro effect, the equilibrium real interest rate is ________ and the equilibrium quantity of loanable funds is ________.

• A) 6 per cent; $600 billion
• B) 8 per cent; $700 billion
• C) 4 per cent; $500 billion
• D) 4 per cent; $700 billion
• E) 8 per cent, $500 billion

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Definitions:

Carbon

A chemical element with symbol C, essential to all life, serving as the basic building block for all organic molecules.

Hydrogen

The lightest and most abundant chemical element in the universe, consisting of just one proton and often one electron.

Potassium Hydroxide

A strong base used in industry and research that is highly reactive with acids and capable of causing severe burns.

Base

In chemistry, a base is a substance that can accept protons (H+) from acids or donate a pair of valence electrons to form a bond, and it often has a high pH when dissolved in water.