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Exhibit: Saving, InExhibit: 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 increases spending, holding other factors constant?
vestment, 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 taxes, holding other factors constant?
Answers: 1
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Amanufacturer has paid an engineering firm $200,000 to design a new plant, and it will cost another $2 million to build the plant. in the meantime, however, the manufacturer has learned of a foreign company that offers to build an equivalent plant for $2,100,000. what should the manufacturer do?
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Exhibit: Saving, InExhibit: Saving, Investment, and the Interest Rate 1 The economy begins in equili...
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