According to the supply and demand model for saving, in a closed economy, an increase in the marginal product of capital will;Select one:O a. Produce an equal increase in the user cost of capital.O b. Decrease the aggregate level of saving.O C. Decrease the real interest rate and increase the level of investment.O d. Increase the real interest rate and increase the level of investment.e. Increase the real interest rate and decrease the level of investment.

There exists equality between savings (S) and investment (I) In classical macroeconomic models. It…

According to the supply and demand model for saving, in a closed economy, an increase in the marginal product of capital wil; Select one: O a. Produce an equal increase in the user cost of capital. O b. Decrease the aggregate level of saving. c. Decrease the real interest rate and increase the level of investment. d. Increase the real interest rate and increase the level of investment. e. Increase the real interest rate and decrease the level of investment.

According to the supply and demand model for saving, in a closed economy, an increase in the marginal product of capital wil; Select one: O a. Produce an equal increase in the user cost of capital. O b. Decrease the aggregate level of saving. c. Decrease the real interest rate and increase the level of investment. d. Increase the real interest rate and increase the level of investment. e. Increase the real interest rate and decrease the level of investment.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Assume there are no investment projects in the economy that yield an expected rate of return of 25 percent or more. But suppose there are $10 billion of investment projects yielding expected returns of between 20 and 25 percent; another $10 billion yielding between 15 and 20 percent; another $10 billion yielding between 10 and 15 percent; and so forth. a. Cumulate these data and present them graphically using the graph below, putting the expected rate of return (and the real interes rate) on the vertical axis and the amount of investment on the horizontal axis. Instructions: Use the tool provided 'ID' to plot the investment demand curve (plot 6 points total). 30 Tools ID 20 15 10 10 20 30 40 50 60 Investment (billions of dollars) Instructions: Enter your answers as a whole number. b. What will be the equilibrium level of aggregate investment if the real interest rate is: 15 percent: $ billion 10 percent: $ billion 5 percent: $ billion Expected rate of return, percent 25
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Usually, when the supply of loanable funds increases, then interest rates Select one: O a. Decrease. O b. Increase. c. Remain unchanged. O d. Might increase or decrease.
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For a closed economy, GDP is $10, consumption is $8, taxes are $1, and the buget deficit is $1, What are private saving and national saving? a. $2 and $1 O b. $1 and $2 O c. $1 and $0 O d. $1 and $1
2. If disposable income is 4130, consumption is 2400, government spending is 431, and total taxes are 911, national saving is then equal to O 3650 O 3219 O 2210 O 819
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Figure 32-1 percent 8 10 20 30 40 50 60 70 $billions Refer to Figure 32-1. In the Figure shown, if the real interest rate is 6 percent, the quantity of loanable funds demanded is O A. $20 billion, and the quantity supplied is $40 billion. O B. $20 billion, and the quantity supplied is $60 billion. O C. $60 billion, and the quantity supplied is $20 billion. O D. $60 billion, and the quantity supplied is $40 billion.
If Y (the output level) = $1,200, consumption = $800, and government purchases! = $300, how much is saving and investment at equilibrium in a closed economy? Select one: O a. saving $0, investment = $0 O b. saving = $100, investment = $100 O c. saving = $200, investment = $100 Od. saving = $100, investment = $200
Which sequence of events describes what is happening here? Real interest (%) azes SN SN new A Quantity of Saving and Investment in real $ bns p.SN=0.1 T.SN=T. Firms receive an investment tax credit, which reduces r and promotes growth. O b. Government increases spending, which increases national saving, lowers real interest rates, promotes investment and growth. O c. Government reduces spending, which decreases national saving, raises real interest rates, reduces investment and growth. O d. None of the answers offered are accurate. Oe Government reduGes snending which increases national saving loweES real interest rates, promotes G Search or type URL %23 2 8. Y R. 1. A. C. B.
Which of the following is not an argument by those who oppose tax-law changes to encourage saving? O A. Saving is not very responsive to changes in the tax rate. O B. Saving is not an important determinant of a nation's ability to produce output. OC. Reducing the budget deficit instead of changing the tax laws could raise saving. O D. Changes in the tax laws to induce saving would distribute the tax burden less fairly.
When the U.S. government removes investment tax credits: O technological innovation advances more rapidly. O the cost of capital increases. O the return on investment increases. O capacity utilization in the economy expands. O consumption spending falls.