First Call, Inc., a smartphone company, plans to build an assembly plant-onethat costs $10 million if the real interest rate is 3 percent a year; a larger plant thatcosts $12 million if the real interest rate is 2 percent a year;, or a smaller plant thatcosts $8 million if the real interest rate is 4 percent a year.Real interest rate (percent per year)4.5-4.0-Draw a graph of First Call's demand for loanable funds curve.3.5-Draw a point to show the quantity of loanable funds demanded when the realinterest rate is1) 4 percent a year. Label it 1.3.0-2) 3 percent a year. Label it 2.3) 2 percent a year. Label it 3.2.5-Draw First Call's demand for loanable funds curve through the points. Label it.2.0-1.5-10111213Loanable funds (millions of dollars)>>> Draw only the objects specified in the question.

The demand for loans in the economic landscape is shaped by elements like interest rates, economic…

First Call, Inc., a smartphone company, plans to build an assembly plant-one that costs $10 million if the real interest rate is 3 percent a year; a larger plant that costs $12 million if the real interest rate is 2 percent a year, or a smaller plant that costs $8 million if the real interest rate is 4 percent a year. Draw a graph of First Call's demand for loanable funds curve. Draw a point to show the quantity of loanable funds demanded when the real interest rate is 1) 4 percent a year. Label it 1. 2) 3 percent a year. Label it 2. 3) 2 percent a year. Label it 3. Draw First Call's demand for loanable funds curve through the points. Label it. 4.5 4.0- 3.5- 3.0- 2.5- 2.04 1.5+ 7 Real interest rate (percent per year) 8 12 Loanablefunds (millions of dollars) >>> Draw only the objects specified in the question. 13 C

First Call, Inc., a smartphone company, plans to build an assembly plant-one that costs $10 million if the real interest rate is 3 percent a year; a larger plant that costs $12 million if the real interest rate is 2 percent a year, or a smaller plant that costs $8 million if the real interest rate is 4 percent a year. Draw a graph of First Call's demand for loanable funds curve. Draw a point to show the quantity of loanable funds demanded when the real interest rate is 1) 4 percent a year. Label it 1. 2) 3 percent a year. Label it 2. 3) 2 percent a year. Label it 3. Draw First Call's demand for loanable funds curve through the points. Label it. 4.5 4.0- 3.5- 3.0- 2.5- 2.04 1.5+ 7 Real interest rate (percent per year) 8 12 Loanablefunds (millions of dollars) >>> Draw only the objects specified in the question. 13 C

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Similar questions

Suppose there are two types of investment in the economy: business fixed investment and residential investment. Suppose that loanable fund market is in equilibrium and the government grants an investment tax credit only for business investment. How does this policy affect the supply and demand for loanable funds, the equilibrium interest rate and equilibrium quantity of loanable funds? Use graph to explain your answer.
Let's say that due to political turmoil in the US and abroad, people all over the world start to lose confidence in American securities. Both Americans and foreigners prefer to do their financial investment elsewhere. As a result, we'd expect the supply of loanable funds to shift to the right and the real interest rate to fall the supply of loanable funds to shift to the left and the real interest rate to rise the supply of bonds to shift to the right and the real interest rate to fall the supply of bonds to shift to the left and the real interest rate to rise
not understanding how to show this
Suppose real GDP is $5,136 billion, taxes collected by the government are $535 billion, government spending is $656 billion, and consumption spending is $3,893 billion. What is the value of private saving?
Where does the demand for loanable funds come from in a closed economy? How does a government adopting a policy of taxing investment from the private sector impact the demand for loanable funds? What happens to the equilibrium interest rate following this policy? Illustrate using the supply and demand in the market for loanable funds.
Macmillan Learning U The graph depicts the market for loanable funds. Shift the appropriate curves to indicate what will happen to the market if there is an improvement in the technology firms use in production. As a result of this change, the real interest rate is now % Real interest rate 5.0 4.5 4.0 3.5 3.0 2.5 2.0 1.5 1.0 and the quantity of funds is $ billion. 0.5 Supply Demand 0.0 0 5 10 15 20 25 30 35 40 45 50 Loanable funds (in billions)
Draw the graph of the effect on the equilibrium in the loanable funds market when corporate taxes increase. Does the demand for loanable funds increase or decrease? Does the interest rate increase of decrease?
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 5 Demand 1 100 200 300 400 500 600 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 Suppose the interest rate is 3.5%. Based on the previous graph, the quantity of loanable funds supplied is than the quantity of loans ▼ of loanable funds. This would encourage lenders to the interest rates they charge, thereby demanded, resulting in a the quantity of loanable funds supplied and the quantity of loanable funds demanded, moving the market toward 0% the equilibrium interest rate of INTEREST RATE (Percent)
Household time preferences increase (people become less patient). Which of the following graphs correctly shows how the loanable funds market changes? Interest rate Loanable funds market Interest rate Savings/Investments Loanable funds market ☆ Interest rate Loanable funds market # Savings/Investments Savings/Investments Interest rate Loanable funds market Savings/Investments
(Figure: Market for Loanable Funds 2) Based on the graph, if business taxes increase, the demand for loanable funds curve will shift from to and the new equilibrium will be at point holding supply constant at So. So Real Interest Rates (%) Do; D₁; c Do; D₁; b D₁; Do; a a b Loanable Funds ($) d S₁ Do D₁