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-In the Figure Above, the SLF Curve Is the Supply

question 155

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      -In the figure above, the SLF curve is the supply of loanable funds curve and the PSLF curve is the private supply of loanable funds curve. If there is no Ricardo-Barro effect and the government now runs a balanced budget, the A)  interest rate will increase from 4 percent to 6 percent. B)  equilibrium interest rate is 6 percent and investment is $1.6 trillion. C)  equilibrium interest rate is 4 percent and investment is $1.8 trillion. D)  there is a surplus of investment funds and the interest rate falls to 4 percent. E)  there is shortage of investment funds of $0.4 trillion.
      -In the figure above, the SLF curve is the supply of loanable funds curve and the PSLF curve is the private supply of loanable funds curve. If there is no Ricardo-Barro effect and the government now runs a balanced budget, the A)  interest rate will increase from 4 percent to 6 percent. B)  equilibrium interest rate is 6 percent and investment is $1.6 trillion. C)  equilibrium interest rate is 4 percent and investment is $1.8 trillion. D)  there is a surplus of investment funds and the interest rate falls to 4 percent. E)  there is shortage of investment funds of $0.4 trillion.
-In the figure above, the SLF curve is the supply of loanable funds curve and the PSLF curve is the private supply of loanable funds curve. If there is no Ricardo-Barro effect and the government now runs a balanced budget, the


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