For each situation below, show quantitatively and explain what is happening in the capital (financial) market. S I X G T
a 200 300 -200 400 300
b 700 600 100 400 400
c -300 300 -400 100 300
d 100 300 -400 500 300
e 500 300 100 400 300

Capital market is at equilibrium and no change in interest rate

Explanation:

In the capital market

National savings = " S + T - G "

At equilibrium position ; National savings = " I + X "

When National savings > "1 + X "  Interest rate decrease because there is an excess of supply while

When National savings > "1 + X" interest rate will increase to balance out the capital market because there is excess of demand.

From the attached table of solution below all values of the National savings = "I + X" this shows that the capital ( financial ) market is at equilibrium position