Draw a graph to illustrate the effect of a decrease in the demand for loanable funds and a smaller decrease in the supply of loanable funds on the real interest rate and the equilibrium quantity of loanable funds. Draw a demand for loanable funds curve. Label it DLF Draw a supply of loanable funds curve. Label it SLF Draw a point at the equilibrium real interest rate and quantity of loanable funds. Label it 1. Draw a curve that shows a decrease in the demand for loanable funds. Label it DLF,. Draw a curve that shows a smaller decrease in the supply of loanable funds. Label it SLF₁. Draw a point at the new equilibrium real interest rate and quantity of loanable funds. Label it 2. KIDS 12.0 10.0 8.0 6.0 40- 2.0 Real interest rate (percent per year) 0.0+ 0.0 5.0 Q Q 1.0 2.0 3.0 4.0 Loanable funds (trillions of 2012 dollars) >>> Draw only the objects specified in the question. G

Draw a graph to illustrate the effect of a decrease in the demand for loanable funds and a smaller decrease in the supply of loanable funds on the real interest rate and the equilibrium quantity of loanable funds. Draw a demand for loanable funds curve. Label it DLF Draw a supply of loanable funds curve. Label it SLF Draw a point at the equilibrium real interest rate and quantity of loanable funds. Label it 1. Draw a curve that shows a decrease in the demand for loanable funds. Label it DLF,. Draw a curve that shows a smaller decrease in the supply of loanable funds. Label it SLF₁. Draw a point at the new equilibrium real interest rate and quantity of loanable funds. Label it 2. KIDS 12.0 10.0 8.0 6.0 40- 2.0 Real interest rate (percent per year) 0.0+ 0.0 5.0 Q Q 1.0 2.0 3.0 4.0 Loanable funds (trillions of 2012 dollars) >>> Draw only the objects specified in the question. G

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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#18. What would happen in the market for loanable funds if the government were to increase the tax on interest income? a The supply of loanable funds would shift right. b The demand for loanable funds would shift right. c The supply of loanable funds would shift left. d The demand for loanable funds would shift left.
3. Supply and demand for loanable funds The following graph shows the market for loanable funds in a closed economy. The upward-sloping orange line represents the supply of loanable funds, and the downward-sloping blue line represents the demand for loanable funds. Supply Demand 100 200 300 400 500 LOANABLE FUNDS (Billions of dollars) A INTEREST RATE (Percent) m 0 0 600
According to how we model the Loanable Funds market in Ch. 6 (considering household savings and taking (T – G) as government’s net ‘saving,’ which could be negative it there were a budget deficit), which of the following shifts the Supply of Loanable Funds curve to the left? (T = taxes; G = government spending.) Group of answer choices A) higher tax rates on business investment spending B) a change in tastes toward consuming less C) higher budget deficit D) change in tastes toward saving more E) lower budget deficit
Recently, the economies of North Korea and Norway have begun to grow very rapidly. This increases their citizens’ income and wealth as well. In turn, these citizens increase their savings not only in their country, but also in the United States. In this case, which of the following statements is correct? A. The supply of loanable funds decreases as savings increase. B. The supply of loanable funds increases as savings increase. C. The demand of loanable funds decreases as savings increase. D. Both supply and demand of loanable funds increase as savings increase. Clear my choice
K Consider the graph to answer the following questions: a. The shift from S, to S₂ represents in the supply of loanable funds. b. With the shift in supply, the equilibrium quantity of loanable funds c. With the change in the equilibrium quantity of loanable funds, the quantity of saving and the quantity of investment ▼ A CI Real Interest Rate Market for Loanable Funds L₂ L1 Loanable Funds ($ per year) S₁ Q
The following graph shows the market for loanable funds in a closed economy. The upward-sloping orange line represents the supply of loanable funds, and the downward-sloping blue line represents the demand for loanable funds. 10 Supply 8 Demand 100 200 300 400 500 600 700 800 900 1000 LOANABLE FUNDS (Billions of dollars) is the source of the supply of loanable funds. As the interest rate falls, the quantity of loanable funds supplied increases v Suppose the interest rate is 4.5%. Based on the previous graph, the quantity of loanable funds supplied is v than the quantity of loans demanded, resulting in a v of loanable funds. This would encourage lenders to v the interest rates they charge, thereby v the quantity of loanable funds supplied and v the quantity of loanable funds demanded, moving the market toward the equilibrium interest rate of 5% . INTEREST RATE (Percent)
Real interest rate (percent per year) 10 2 0 DLF 150 300 450 600 750 900 Loanable funds (billions of 2009 dollars) In the above figure, technological progress that increases the expected profit will shift the demand for loanable funds curve leftward. shift the demand for loanable funds curve rightward. have no effect on the demand for loanable funds curve. make the demand for loanable funds curve become horizontal.
Step 2 Determine the equilibrium real interest rate. The table below is broken down by Month, Real Interest Rate (%), Loanable Funds (trillions of $), Exogenous Change, Equilibria (increases, decreases, or no change. Use the data table to determine the equilibrium real interest rate after certain factors change: Equilibria (increases, decreases, or no change) Month Real Interest Loanable Funds Exogenous Rate (%) (trillions of $) Change 3 no change no change January 3% April 3% 4 increased fund ? supply decreased fund July 4% supply December 3% 3 increased fund ? demand
Three students have each saved $1,000. Each has an investment opportunity in which he or she can invest up to $2,000. Here are the rates of return on the students' investment projects: Return Student (Percent) Antonio 4 Dmitri Frances 15 Assume borrowing and lending is prohibited, so each student uses only personal saving to finance his or her own investment project. Complete the following table with how much each student will have a year later when the project pays its return. Money a Year Later Student (Dollars) Antonio Dmitri Frances
Consider the market for loanable fund. Suppose that government started to give tax incentives for investment (so the cost of investment fell.) Answer which curve (Demand or Supply) would shift to which direction (Left or Right), and answer how the equilibrium saving would change (Decrease or Increase)Curve: Direction: Saving:
PLEASE HELP ME
If expectations about future income change, there is no change in saving until income actually changes. a decrease in saving if people expect income to increase in the future. an increase in saving if people expect income to increase in the future. a decrease saving if people expect income to decrease in the future. a change in the quantity of loanable funds supplied and a movement along the supply of loanable funds curve.