The table above gives the demand for loanable funds and private supply of loanable funds schedules
a. What is the equilibrium real interest rate and quantity of loanable funds?
b. Suppose that the government has a budget surplus of $2.5 billion. If there is no Ricardo-Barro effect, what is the equilibrium real interest rate and quantity of loanable funds?
a. The equilibrium real interest rate is 8 percent and the quantity of loanable funds is $11.0 billion.
b. Add $2.5 billion to each quantity of the supply of loanable funds schedule. The equilibrium real interest rate becomes 6 percent and the equilibrium quantity of loanable funds increases to $12.5 billion.
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The costs of organizing all the affected parties so that bargaining can take place are called
A) search costs. B) collectivization costs. C) negotiation costs. D) monitoring and enforcement costs.
The figure above shows an education market in which the government is providing households with vouchers. What is the dollar value of a voucher in this market?
A) $4,000 B) $8,000 C) $12,000 D) $16,000 E) None of the above answers is correct.