The table sets out data for an econo Real interest rate (percent per year) Loanal (billie 4. 6. 8. 9. 10 a) Calculate the equilibrium real interest rate, b) If planned saving increases by $0.5 billion a interest rate. c) If planned investment increases by $1 billion interest rate. d) If the government's budget becomes a def investment? Does crowding out occur?

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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.