1. Suppose the government borrows $20 million more next year than this year. a. Draw and fully label a diagram to illustrate the market for loanable fund to analyze this policy. b. Does the rate of interest rise or fall? c. What happens to investment? To private savings? To public savings? To national savings? d. How does the elasticity of the supply of loanable funds affect the size of these changes? e. How does the elasticity of the demand of loanable funds affect the size of these changes?
1. Suppose the government borrows $20 million more next year than this year. a. Draw and fully label a diagram to illustrate the market for loanable fund to analyze this policy. b. Does the rate of interest rise or fall? c. What happens to investment? To private savings? To public savings? To national savings? d. How does the elasticity of the supply of loanable funds affect the size of these changes? e. How does the elasticity of the demand of loanable funds affect the size of these changes?
Chapter1: Making Economics Decisions
Section: Chapter Questions
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Please assist with questions below in detailed manner.
![1. Suppose the government borrows $20 million more next year than this year.
a. Draw and fully label a diagram to illustrate the market for loanable fund to analyze
this policy.
b. Does the rate of interest rise or fall?
c. What happens to investment? To private savings? To public savings? To national
savings?
d. How does the elasticity of the supply of loanable funds affect the size of these
changes?
e. How does the elasticity of the demand of loanable funds affect the size of these
changes?](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fdb72e28a-40cf-4e0b-babe-9ae5dd59d0fc%2Fdae85d90-3c64-442e-be40-7a4653306663%2Fu3qfxww_processed.png&w=3840&q=75)
Transcribed Image Text:1. Suppose the government borrows $20 million more next year than this year.
a. Draw and fully label a diagram to illustrate the market for loanable fund to analyze
this policy.
b. Does the rate of interest rise or fall?
c. What happens to investment? To private savings? To public savings? To national
savings?
d. How does the elasticity of the supply of loanable funds affect the size of these
changes?
e. How does the elasticity of the demand of loanable funds affect the size of these
changes?
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