Essay
The demand for capital is QD = 100 - 20r and the supply of capital is QS = 12r - 28, where r is the interest rate and Q is the quantity of capital in millions of dollars. Assume that households increase savings such that households save $20 million more at every interest rate level. What are the new equilibrium interest rate and quantity of capital?
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The original supply curve, QS = 12r - 28,...View Answer
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