Table 23.3.2 -Refer to Table 23.3.2. the Table Shows an Economy's Demand

question 87

Multiple Choice

Table 23.3.2

-Refer to Table 23.3.2. The table 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)decrease; $1
• C)increase; $1.5
• D)decrease; $1.5
• E)increase; $2