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jack103106 jack103106
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A year ago
The following table lists some economic agents and their intentions. At present the interest rate is 5 percent.

WhoIntentAmount Needed
Mike Save for child's college$50,000
SophieBuy a car$10,000
Pie's PizzaExpand restaurant$100,000
SaraSave for retirement$100,000

Refer to the table above. Assume that Peter, who needs a loan of $10,000 to repair his business, enters the loanable funds market. Inflation is 3 percent. If the demand for credit is perfectly inelastic, which answer below could describe the new equilibrium?

Q* = $160,000, r = 3 percent

Q* = $120,000, r = 3 percent

Q* = $110,000, r = 4.5 percent

Q* = $140,000, r = 5 percent
Textbook 
Macroeconomics

Macroeconomics


Edition: 3rd
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wardasidwardasid
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A year ago
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