Exhibit: Saving, Investment, and the Interest Rate 1

question 95

Multiple Choice

Exhibit: Saving, Investment, and the Interest Rate 1

Reference: Ref 3-1
 
(Exhibit: Saving, Investment, and the Interest Rate 1) The economy begins in equilibrium at Point E, representing the real interest rate, r , at which saving, S , equals desired investment, I . What will
Be the new equilibrium combination of real interest rate, saving, and investment if the government cuts taxes, holding other factors constant?

• A)Point A
• B)Point B
• C)Point C
• D)Point D