Question: Could someone please answer this question truly without copying and pasting answers from different users please? the reason I am posting this question is because
Could someone please answer this question truly without copying and pasting answers from different users please? the reason I am posting this question is because other's user answers is incomplete, this question need mathematical equations as well as graphs indicated in it. Please complete the question throughly as it is stated. Highly appreciated.
Assume that the government is running a balanced budget (revenues equal spending). Then, government decides to increase education spending by $200 billion and finance the spending by selling bonds. Therefore, spending increases and it is funded by borrowing. Use the loanable funds market to explain how the equilibrim is going to be affected (effects on interest rate, investment and savings). Use the math and the graphs. Is there any crowding out in the market?
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