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Suppose the president of a country uses $250 million to build a highway. The expenditure...

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Accounting

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Suppose the president of a country uses $250 million to build a highway. The expenditure is entirely financed by borrowing? The government did not borrow any money before building the highway. Bctore the government borrowing, the equibbrium amount of savings 5600 milion. After the government borrowing the equilibrium amount of savings $700 milion. Use the given information to answer questions 33-38. How would this expenditure affect the loanable funds market? demand for loanable funds shifts to the right demand for loanable funds shiets to the left supply of loanable funds shifts to the right Question 34 1. 5 pts How much is the amount of firms' investments before the Bovernment borrowing? Answer, The amount of firms' investments o 5 . milion. Quection 35 How mech in the amount of firms' investments after the govemment borrowing? Answer: The anount of firms investments 75 millicas Question 36 Does cquilibrium interest rate increase or decrease atter the Bowemment borrowire

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