Question: Why is it that when planned saving increases by $0.5 billion at real interest rate, the real int rate = 5.5%??? @ 7.2 Study Plan
Why is it that when planned saving increases by $0.5 billion at real interest rate, the real int rate = 5.5%???

@ 7.2 Study Plan Problem 7 (algo) The table sets out the data for an economy when the government's budget is balanced. Calculate the equilibrium real interest rate, investment, and private saving. If planned saving increases by $0.5 billion at each real interest rate, explain the change in the real interest rate. If planned investment increases by $1 billion at each real interest rate, explain the change in saving and the real interest rate. The real interest rate is 6 percent a year. >>> Answer to 1 decimal place. The quantity of investment is $ 7.0 billion, and the quantity of private saving is $ 7.0 billion. If planned saving increases by $0.5 billion at each real interest rate, the real interest rate equals 5.5' percent. If planned investment increases by $1.0 billion at each real interest rate, the real 35 Question Help _ Real Loanable funds Loanable funds Interest rate demanded supplied garrizgs (billions of 2007 dollars) 4 8.0 6.0 5 7.5 6.5 6 7.0 7.0 7 6.5 7.5 8 6.0 8.0 9 5.5 8.5 10 5.0 9.0
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