The demand for capital is QD = 80 - 15r and the supply of capital is QS = 20r - 60, where r is the interest rate and Q is the quantity of capital in millions of dollars. Businesses become more optimistic about the business environment and borrow $70 million more capital at each interest rate level. The equilibrium quantity of capital as a result of this newfound optimism is ____.
A) 40
B) 20
C) 50
D) 60
Correct Answer:
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