Interest Rate (%) 11 13 15 17 19 21 Demand and supply schedule for financial capital QD of financial capital (in billions) $800 $700 $600 $550 $500 $480 QS of financial capital (in billions) $420 $510 $600 $660 $720 $750 Given the data shown in the table above, answer the following: 1. What is the equilibrium interest rate and equilibrium quantity in this market? Justify your answer! 2. If interest rate is set at 19%, do we have a shortage or a surplus of financial capital? Justify your answer! How much is the shortage or surplus amount? 3. If interest rate is set at 13%, do we have a shortage or a surplus of financial capital? Justify your answer! How much is the shortage or surplus amount?
Interest Rate (%) 11 13 15 17 19 21 Demand and supply schedule for financial capital QD of financial capital (in billions) $800 $700 $600 $550 $500 $480 QS of financial capital (in billions) $420 $510 $600 $660 $720 $750 Given the data shown in the table above, answer the following: 1. What is the equilibrium interest rate and equilibrium quantity in this market? Justify your answer! 2. If interest rate is set at 19%, do we have a shortage or a surplus of financial capital? Justify your answer! How much is the shortage or surplus amount? 3. If interest rate is set at 13%, do we have a shortage or a surplus of financial capital? Justify your answer! How much is the shortage or surplus amount?
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Transcribed Image Text:Interest Rate (%)
11
13
15
17
19
21
Demand and supply schedule for financial capital
QD of financial capital (in billions)
$800
$700
$600
$550
$500
$480
QS of financial capital (in billions)
$420
$510
$600
$660
$720
$750
Given the data shown in the table above, answer the following:
1. What is the equilibrium interest rate and equilibrium quantity in this market? Justify your answer!
2. If interest rate is set at 19%, do we have a shortage or a surplus of financial capital? Justify your answer! How much is the shortage or surplus amount?
3. If interest rate is set at 13%, do we have a shortage or a surplus of financial capital? Justify your answer! How much is the shortage or surplus amount?
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