Exhibit: Saving, Investment, and the Interest Rate 1 Real Saving, S interest rate, S, S S ܕܐ TH Desired investment S S S

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Exhibit: Saving, Investment, and the Interest Rate 1 Real Saving, S interest rate, S, S S ܕܐ TH Desired investment S S S

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Exhibit: Saving, Investment, and the Interest Rate 1 Real Saving, S interest rate, S, S S ܕܐ TH Desired investment S S S Saving, investment The economy begins in equilibrium at point E, representing the real interest rate r 1 at which saving S1 equals desired investment / 1. What will be the new equilibrium combination of real interest rate, saving, and investment if the government increases spending, holding other factors constant? O A. point B O B. point D O C. point C O D.point A
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