Question: I need assistance the this problem. Can someone please help me? Effects of a government budget deficit Consider a hypothetical open economy. The following table

 I need assistance the this problem. Can someone please help me?Effectsof a government budget deficitConsider a hypothetical open economy. The following table

I need assistance the this problem. Can someone please help me?

Effects of a government budget deficit

Consider a hypothetical open economy. The following table presents data on the relationship between various real interest rates and national saving, domestic investment, and net capital outflow in this economy, where the currency is the U.S. dollar. Assume that the economy is currently experiencing a balanced government budget.

Real Interest RateNational SavingDomestic InvestmentNet Capital Outflow
(Percent)(Billions of dollars)(Billions of dollars)(Billions of dollars)
76030-10
65540-5
550500
445605
3407010
2358015

Given the information in the preceding table, use the blue points (circle symbol) to plot the demand for loanable funds. Next, use the orange points (square symbol) to plot the supply of loanable funds. Finally, use the black point (cross symbol) to indicate the equilibrium in this market.

presents data on the relationship between various real interest rates and nationalsaving, domestic investment, and net capital outflow in this economy, where thecurrency is the U.S. dollar. Assume that the economy is currently experiencing

Market for Loanable Funds 10 O Demand 8 -0- Supply 6 + REAL INTEREST RATE 4 Equilibrium 2 0 40 60 80 100 0 20 QUANTITY OF LOANABLE FUNDSREAL INTEREST RATE Net Capital Outflow 1D 15 1D 5 U 5 1D 15 NET CAPITAL OUTFLOW [Billions of dollars) 2!] Market for Foreign-Currency Exchange 10 A 8 Initial Supply 6 Supply with Deficit REAL EXCHANGE RATE 4 2 Demand -20 -15 -10 -5 0 5 10 15 20 QUANTITY OF DOLLARS (Billions)

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