The table sets out the data for an economy when the government's budget is belanced. Calculate the equilibrium real interest rate investment, and private saving If planned saving increases by $0.5 billion at each real interest rate, explain the change in the real interest rate planned Investment increases by $1 billion at each real interest rate, explain the change in saving and the real interest The realitrate is percet a you Real interest rate percent per year Loanable funde Loanable funde demanded supplied ons of 2007 dar 8.0 75 7.0 6.5 6.0 50 7.0 75 8.0 85 9.0 9.6 100

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Public Saving

Public saving deals with the amount which has been in excess after meeting all the obligatory expenses and investment of the government. Taxes are collected by the government to meet its day-to-day expenditures. The obligatory expenses include all those expenses which are mandatory for the government. It cannot be avoided as it is inevitable.