Multiple Choice
Use the following to answer questions :
Exhibit: Saving, Investment, and the Interest Rate 1 
-(Exhibit: Saving, Investment, and the Interest Rate 1) The economy begins in equilibrium at Point E, representing the real interest rate, r1, at which saving, S1, equals desired investment, I1. What will be the new equilibrium combination of real interest rate, saving, and investment if the government cuts spending, holding other factors constant?
A) Point A
B) Point B
C) Point C
D) Point D
Correct Answer:
Verified
Correct Answer:
Verified
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