Among the different stages of red wine production (selection of grapes, crushing, fermentation, blending and fining, adding preservatives, filtration and bottling), the first stage-selection of grapes is called the downstream and the final stage-packaging/bottling is called the upstream

In the above figure, which point represents an attainable but inefficient production point?

A) point C B) point N C) point L D) point D

Suppose the federal government is successful in reducing the budget deficit, households decide to increase their saving, corporate taxes are reduced, and businesses expect to see an increase in future profits

Use the loanable funds model to explain how each of these events affects the demand and supply of loanable funds and illustrate your answer with a graph. Describe what should happen to the equilibrium real interest rate and the equilibrium levels of saving and investment?