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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


Definitions:

Interest on Interest

The concept of earning interest on previously earned interest, contributing to compound growth.

Compounded Annually

Interest calculation method where the interest is added to the principal at the end of each year, and the total becomes the principal for the next year.

Company Expansion

The process of a company increasing its size, operations, or market presence, often through investment, acquisitions, or increasing its customer base.

Compounded Monthly

The process of calculating interest on both the initial principal and the accumulated interest of previous periods on a monthly basis.

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