The diagram below shows the market for financial capital in the long run when real GDP is equal to potential output,Y*. FIGURE 25-3
-Refer to Figure 25-3.Suppose the interest rate in this market for financial capital is 4%.In this case there is an excess ________ financial capital of ________ billion dollars.

Question

The diagram below shows the market for financial capital in the long run when real GDP is equal to potential output,Y*.  FIGURE 25-3
-Refer to Figure 25-3.Suppose the interest rate in this market for financial capital is 4%.In this case there is an excess ________ financial capital of ________ billion dollars.

Quizplus · Accepted Answer

At an interest rate of 4%, the supply of financial capital exceeds the demand, resulting in an excess supply of 30 billion dollars.

The Diagram Below Shows the Market for Financial Capital in the Long