The table sets out the data for an economy when thegovernment's budget is balanced.

Calculate the equilibrium real interestrate, investment, and private saving.

If planned saving increases by$0.5 billion at each real interestrate, explain the change in the real interest rate.

If planned investment increases by$1 billion at each real interestrate, explain the change in saving and the real interest rate.

The real interest rate is

5 percent a year.

>>> Answer to 1 decimal place.

The quantity of investment is $..... ?

• and the quantity of private saving is ...?

Real Interest Rate percent per year loanable funds demanded(in billion dollars) loanable funds supplied(In billion dollars)

4 7.5 6.5

5 7.0 7.0

6 6.5 7.5

7 6.0 8.0

8 5.5 8.5

9 5.0 9.0