Assuming the Economy Was in Equilibrium,use the Following Information to Determine

question 89

Multiple Choice

Assuming the economy was in equilibrium,use the following information to determine the amount of funds demanded by the government in the loanable funds market.
$$\begin{array} { | l | r | } \hline \text { Consumption Spending } & \$ 3.5 \text { trillion } \\\hline \text { Net Taxes } & \$ 2.7 \text { trillion } \\\hline \text { Household Saving } & \$ 2.5 \text { trillion } \\\hline \text { Investment Spending } & \$ 2.2 \text { trillion } \\\hline \text { Government Purchases } & \$ 3.0 \text { trillion } \\\hline\end{array}$$

• A) $0.3 trillion
• B) $2.2 trillion
• C) $2.5 trillion
• D) $3.0 trillion
• E) $5.2 trillion

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Definitions:

Net Realizable Value

The estimated selling price of goods, minus the costs of their completion and disposal.

Present Value

The present value of a future amount of money or series of cash flows, assuming a certain return rate.

Replacement Cost

The current cost of replacing an asset with a new one of similar kind and quality, used in accounting to value assets.