An economy's saving rate increased from -0.1 percent in 2015 to 2.0 percent in 2016 to 2.4 percent in 2017, to 2.9 percent in 2018, and to 3.0 percent in 2019.Explain why the saving rate might have increased and its effect on the supply of loanable funds.The saving rate might have increased becauseThe increase in the saving rate willthe supply of loanable funds.A. financial market turmoil could decrease wealth and expected future income; increaseB. the demand for loanable funds could have decreased; decreaseC. financial market turmoil always increases wealth and expected future income; increaseD. financial market turmoil could decrease wealth and expected future income; decreaseO E. the demand for loanable funds could have decreased; increaseClick to select your answer.javascript:doExercise(13);esc吕0888F1F2F3F4F5F6F7F8F9F10!@#2$&1234578QWEYtabT

Since 2011, when the recent financial crisis began, the US saving rate has been rising. With the…

An economy's saving rate increased from -0.1 percent in 2015 to 2.0 percent in 2016 to 2.4 percent in 2017, to 2.9 percent in 2018, and to 3.0 percent in 2019. Explain why the saving rate might have increased and its effect on the supply of loanable funds. The saving rate might have increased because The increase in the saving rate will the supply of loanable funds. O A. financial market turmoil could decrease wealth and expected future income; increase O B. the demand for loanable funds could have decreased; decrease O C. financial market turmoil always increases wealth and expected future income; increase O D. financial market turmoil could decrease wealth and expected future income; decrease O E. the demand for loanable funds could have decreased; increase

An economy's saving rate increased from -0.1 percent in 2015 to 2.0 percent in 2016 to 2.4 percent in 2017, to 2.9 percent in 2018, and to 3.0 percent in 2019. Explain why the saving rate might have increased and its effect on the supply of loanable funds. The saving rate might have increased because The increase in the saving rate will the supply of loanable funds. O A. financial market turmoil could decrease wealth and expected future income; increase O B. the demand for loanable funds could have decreased; decrease O C. financial market turmoil always increases wealth and expected future income; increase O D. financial market turmoil could decrease wealth and expected future income; decrease O E. the demand for loanable funds could have decreased; increase

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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QUESTION 9 Use the following diagram to answer this question The accompanying graph shows the market for loanable funds in equilibrium. Interest rate (%) 12 10 8 6 4 0 XH 2 3 E 4 6 5 Quantity of loanable funds (trillions of dollars) S Which of the following might produce a new equilibrium interest rate of 2% and a new equilibrium quantity of loanable funds of $5 trillion? OA. Firms become pessimistic about the future and, as a result, they cut back on their plans to buy new equipment and build new factories. ⒸB. Congress decreases the tax rate on interest income. C. Capital inflows from foreign citizens are declining. D. The U.S. government offers a tax credit for firms that built new factories in the U.S.
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Indicate the Quantity demanded and Quantity supplied of loanable funds if the Interest rates increases by 2% (from the equilibrium rate). would changed in interest rate cause a movement along the curve or shift? Interest rate 24% 22 20 ' 18 16 14 12 10 a 6 4 2 Y S ° $200 $400 600 D 800 1,000 1,200 Quantity of leanable funds (billions of dollars) Indicate the Quantity demanded and Quantity supplied of loanable funds if the Interest rates increases by 2% (from the equilibrium rate). would changed in interest rate cause a movement along the curve or shift?
Using the graph of the loanable funds market below, if the supply of loanable funds increases from SFL and the demand for loanable funds increases from DLF, then the equilibrium interest rate will D'LF DuF Qo Q. Q2 QuF decrease to i2. O remain at i0. increase temporarily and then decrease. O increase to i1.
Construct the market for loanable funds and use it to illustrate and explain each of the following:a) How an increase in the government budget deficit will affect equilibrium interest rate and investment spending of firms, other factors constantb) How an increase in household savings as they become more financial literate will affect equilibrium interest rate and investment spending of firms, other factors constantc) How an increase in business confidence will affect equilibrium interest rate and investment spending of firms, other factors constant.
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4. The money supply, the loanable funds market, and interest rates Changes in the money supply affect the interest rate through changes in the supply of loans, Real GDP, the price level, and the expected inflation rate. True or False: The income effect describes a change in the interest rate due to a change in the Real GDP. True O False The following graph shows the supply and demand curves in the market for loanable funds. Consider an increase in the Real GDP. INTEREST RATE Adjust the following graph to show the effect of this increase in the Real GDP. QUANTITY OF LOANABLE FUNDS The liquidity effect The price-level effect SLE The income effect The expectations effect DLF ܘ ܘ Which of the following refer to changes that affect the demand for loanable funds but not the supply? Check all that apply. DLF SLF (?)