The equilibrium quantity of loanable funds exchanged

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Suppose the government of Country L runs a balanced budget in Year 1 and a budget surplus in Year 2. Using a supply and demand graph, depict this change. Label the axes, curves, and the beginning and end equilibrium real interest rates and equilibrium quantities of loanable funds exchanged. In words, what happens to the equilibrium real interest rate and the equilibrium quantity of loanable funds exchanged?

Reference no: EM13898335

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