: 30- 0 10/25/20 80 out of 100 O 00:45:16 The graph below depicts the loanable funds market in the United States. The interest rate is measured in percent, and quantity is measured in billions of dollars. The supply curve, S1, represents the savings by U.S. households. The demand curve, D1, represents investment spending by U.S.forms on capital projects. Loanable Funds Market Interest Rate 16 15 14 13 12 11 10 7 . 5 4 3 2 01 SUBMIT ANSWER 13 OF 15 QUESTIONS COMPLETED < 14/15 > search DOLL
Interest Rate 16 15 14 S2 13 12 11 10 5 3 2 D1 1 0 0 Quantity (billions of dollars)
Suppose the current interest rate is 14%. At this interest rate, there is an of $ billion excess demand neither excess demand nor excess supply excess supply Part 2 (1.2 points) See nt The graph below depicts the same loanable funds market from Part 1. The market is in equilibrium, with an interest rate of 8%, and $140 billion exchanged. Suppose that the U.S. government needs to borrow $80 billion to finance an infrastructure project. Use the line tool to draw the new demand curve to illustrate the effect of this change. Start the new demand curve at 14% interest and end it at 2%.
out ot 100 UU.14.41 Loanable Funds Market Interest rate 16 15 S2 14 13 12 11 10 9 8 7 6 5 4 Nw 01 O o Quantity (billions of dollars)
Part 3 (2.4 points) See nt At the new equilibrium interest rate, U.S. households will save $ billion, and U.S.forms will invest $ billion