Assuming the market for loanable funds is in equilibrium, use the following numbers to determine the quantity of loanable funds supplied.
$$\begin{array} { | l | c | }
\hline \text { GDP } & \$ 8.7 \text { trillion } \
\hline \text { Consumption Spending } & \$ 3.2 \text { trillion } \
\hline \text { Taxes Net of Transfers } & \$ 2.7 \text { trillion } \
\hline \text { Government Purchases } & \$ 3.0 \text { trillion } \
\hline
\end{array}$$

Question

Assuming the market for loanable funds is in equilibrium, use the following numbers to determine the quantity of loanable funds supplied.
$$\begin{array} { | l | c | } 
\hline \text { GDP } & \$ 8.7 \text { trillion } \
\hline \text { Consumption Spending } & \$ 3.2 \text { trillion } \
\hline \text { Taxes Net of Transfers } & \$ 2.7 \text { trillion } \
\hline \text { Government Purchases } & \$ 3.0 \text { trillion } \
\hline
\end{array}$$

Quizplus · Accepted Answer

To determine the quantity of loanable funds supplied in the market, we need to use the formula:

$Savings = GDP - Consumption - Taxes + Transfers - Government Purchases$

Here, we don't have information about transfers, so we can ignore that term. Plugging in the given values, we get:

$Savings = 8.7 - 3.2 - 2.7 - 3.0 = \boxed{2.5	ext{ trillion}}$

Therefore, the correct answer is B) $2.5$ trillion.

Assuming the Market for Loanable Funds Is in Equilibrium, Use