(1)    Suppose there are more borrowers than lenders in the economy.what is the aggregate effect Of a decrease in the interest rate on C,C"and S ?

Q: National savings is equal to the sum of private savings and public savings. To make our notation a…

A: National saving = Private savings + Public savings National savings = S Private savings = V Public…

Q: How does this very short-term nominal interest rate, used only betweenbanks, have the power to shake…

A: The federal funds rate is the interest rate at which commercial banks lend reserve balances to each…

Q: Long run real interest rates are expected to increase. How will an accountant and economist view the…

A: An interest rate that has been modified to take inflation into consideration is known as a real…

Q: -Explain how a consumption tax could lead to a decrease in real interest rates.

A: Consumption is the share of income that consumer spends and not save. The income of a consumer is…

Q: million more supplied at every interest rate. Calculate the new equilibrium interest rate and…

A: Given: Q1.Table shows the amount of savings and borrowing in a market, measured in millions of…

Q: Suppose the real interest rate is higher than the equilibrium interest rate. We can predict that  a.…

A: Investment has an inverse relationship with interest rate. It has a downward sloping curve. Savings…

Q: Explain how a consumption tax could lead to a decrease in real interest rates.

A: A consumption tax is the amount paid by the individuals, firms and organizations on the purchase of…

Q: An economy is initially described by the following equations: C = 60+ 0.8(Y-T) I = 120-5r M/P =…

A: The IS-LM model is a macroeconomic framework used to analyze the relationship between interest…

Q: Selim has no income in period 1 (consumption now) and an income of 1800₺ in period 2 (consumption…

A: here we calculate the maximum amount the Salim can borrow in period 1 by the following method as…

Q: Refer to Figure 11.1. A movement from Point D to Point A can be caused by   Group of answer…

A: Aggregate demand is the sum of Consumption, Investment, government spending and net export.  So, AD…

Q: Explain, why is reducing the interest rate not necessarily enough to stimulate investment spending?

A: The money used by firms and businesses to buy capital equipments and tools to increase production…

Q: Suppose that the government provides tax cuts for those who invest in new capital. Illustrate and…

A: The loanable funds market is describes the interaction between savers (who supply funds) and…

Q: The following equations describe an economy. (Think of C , I , G , etc., as being measured in…

A: Note:- Since we can only answer up to three subparts, we'll answer the first three. Please repost…

Q: Which of the following is true? Question 37Answer a. The loanable funds model is essentially a model…

A: The two main models of the rate of interest are the loanable funds model and the money market model.…

Q: What is the term structure of interest rates and what can it tell you about the outlook for the…

A: The term structure of interest rates refers to the connection between interest rates and the time to…

Q: An economy is described by the following equations: C= 2,600+ 0.8(Y-T) - 10,000r IP = 2,000-10,000r…

A: Aggregate demand refers to the total quantity of goods and services that households, businesses,…