2. The market for capital The following graph shows the supply of and demand for capital in a market over the last year. You can see that the demand for capital has increased over the last year (the demand curve shifted to the right). Place the black X at the equilibrium interest rate and the quantity of capital. (?) INTEREST RATE, r (Percent) 20 18 16 14 12 2 0 S Do D2 D1 0 2 10 12 14 16 18 20 CAPITAL (Billions of dollars) The market interest rate increased by 2.0%, and the amount of capital borrowed increased Weakened +*+ Equilibrium Does it appear that the economy has strengthened or weakened over the past year? Strengthened by $2.0 billion.

2. The market for capital The following graph shows the supply of and demand for capital in a market over the last year. You can see that the demand for capital has increased over the last year (the demand curve shifted to the right). Place the black X at the equilibrium interest rate and the quantity of capital. (?) INTEREST RATE, r (Percent) 20 18 16 14 12 2 0 S Do D2 D1 0 2 10 12 14 16 18 20 CAPITAL (Billions of dollars) The market interest rate increased by 2.0%, and the amount of capital borrowed increased Weakened +*+ Equilibrium Does it appear that the economy has strengthened or weakened over the past year? Strengthened by $2.0 billion.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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