Multiple Choice

-The above table has the private demand for loanable funds and the private supply of loanable funds schedules. If the government budget deficit is $200 billion, and there is no Ricardo-Barro effect, the equilibrium real interest rate is ________ and the equilibrium quantity of investment is ________.
A) 8 per cent; $700 billion
B) 8 per cent, $500 billion
C) 6 per cent; $600 billion
D) 4 per cent; $700 billion
E) 4 per cent; $500 billion
Correct Answer:
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