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Initial value of capital inflows for economy

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Initially in an economy net taxes, T - TR, are equal to $400 while government expenditures are equal to $400. Furthermore, this economy is initially a closed economy. Tthe demand for loanable funds by businesses is given by the equation r = 10 - (1/100)LFD where r is the interest rate expressed as a percent rather than a decimal and LFD is the quantity of loanable funds demanded. The supply of loanable funds curve (LFS) curve is given by the equation r = 2 + (1/300) LFS where LFS is the quantity of loanable funds supplied. Calculate the initial value of capital inflows for this economy.

Reference no: EM131077141

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