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

---

Definitions:

Degenerate Problems

In mathematical optimization, these are problems where the solution involves degeneracy, which may affect the interpretation or analysis of the solution.

Feasible Solution

A possible and practical resolution or answer that meets all defined constraints.

Supply

The total amount of a product or service that is available for purchase at any given point in time.

Transportation Problem

A type of optimization challenge in operations research focusing on finding the most efficient distribution of products from several suppliers to multiple consumers.