3. If at a given real interest rate desired national saving is $120 billion, domestic investment is $84 billion, and net capital outflow is $56 billion, then at that real interest rate in the loanable funds market there is a a. surplus. The real interest rate will fall. b. shortage. The real interest rate will fall. c. shortage. The real interest rate will rise. d. surplus. The real interest rate will rise.

3. If at a given real interest rate desired national saving is $120 billion, domestic investment is $84 billion, and net capital outflow is $56 billion, then at that real interest rate in the loanable funds market there is a a. surplus. The real interest rate will fall. b. shortage. The real interest rate will fall. c. shortage. The real interest rate will rise. d. surplus. The real interest rate will rise.

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter21: Financial Markets, Saving, And Investment

Section: Chapter Questions

Problem 9P

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Similar questions

If at a given real interest rate desired national saving is $115 billion, domestic investment is $60 billion, and net capital outflow is $40 billion, then at that real interest rate in the loanable funds market there is a A. surplus. The real interest rate will fall. B. surplus. The real interest rate will rise. C. shortage. The real interest rate will rise. D. shortage. The real interest rate will fall.
A country has a net capital outflow of $700 billion and domestic investment of $120 billion. What is the quantity of loanable funds demanded? A. $700 billion B. $120 billion C. $580 billion D. $820 billion
Consider an economy in which GDP is $30 billion. Tax revenue is $7 billion, consumption is $15 billion, and the government has a budget surplus of $2 billion. Show your work in each of the following questions.(c) What is national saving?(d) What is the level of investment?
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EqUuil rate= 17% , borrowing by 171 million at old interest rate 15%. compared to value 151 million Question 2. Suppose initially the market for loanable funds is in equilibrium with I*-S*=300 million. Equilibrium interest rate is 1#%. Other things being the same, assume there is a rise in government borrowing by $1#1 million. At the old interest rate (1#%), what would the amount of national saving (S) equal to? What would happen to the interest rate value once the new equilibrium is reached? (Will it change? How?) By how much, you would think that investment (I), national saving, and private saving might change in the new equilibrium (compared to value S1#1 million), and would it be an increase, decrease, or no change? [Use maximum five sentences to clarify vour computations. Type vour answers strietly in the provided space before the next
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] In the loanable funds market model, assuming everything else is constant, which curve (supply of funds or demand for funds) is affected if there is an increase in national saving? How will equilibrium real interest rate and equilibrium quantity of loans change?
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1) In the loanable funds market model, assuming everything else is constant, which curve (supply of funds or demand for funds) is affected if there is an increase in national saving? How will equilibrium real interest rate and equilibrium quantity of loans change as a result?
For a closed economy, GDP is $18 trillion, consumption is $13 trillion, taxes are $2 trillion and the government runs a deficit of $1 trillion. What are private saving and national saving?
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