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1. If there is a shortage of loanable funds, then a. the quantity of loanable funds demanded is greater than the quantity of
Temes cmaarct aha the iterest Tdte is berow equmoTium If GDP measured in billions of current dollars is $5,465, consumption i
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Answer #1

Answer 1:

a. The quantity of loanable funds demanded is greater than the quantity of loanable funds supplied and the interest rate is above equilibrium.

Explanation:

When demand of loanable fund is higher than quantity of loanble fund supplied, there will be shortage of loanable funds and interest rate will rise.

Hence option a is correct and other options b, c, and d are incorrect.

Answer 2:

GDP = C + I + G + Net Exports

Net Exports = GDP - C - I - G = 5465 - 3657 - 741 - 1098 = - $31

Net Exports = -$31 billions

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