Answer Happy

Consider the market for financial capital and the relationship among saving, investment, and the interest rate. In what follows, assume that the economy is in a long-run equilibrium with Y=Y*. Suppose the government decides to encourage national saving. Use the three-point curve drawing tool to draw and label a new NS curve. Carefully follow the instructions above, and only draw the required object. How could government do this? Government can encourage more national saving by O A. creating incentives for households to save and limiting government deficits. O B. creating incentives for households to save and limiting government surpluses. O C. creating disincentives for households to consume and limiting government deficits. OD. All of the above E. A and C but not B What would be the effects of such a policy please answer this part If the government successfully encourages more national saving, then interest rates will O A. fall, investment will increase, and the growth rate will increase. B. rise, investment will increase, and the growth rate will increase. C. fall, investment will decrease, and the growth rate will decrease. O D. rise, investment will decrease, and the growth rate will decrease. C C Real Interest Rate Financial Capital ($) NS' NS