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For parts a)-d), evaluate the effect of each of the following events on the market for loanable funds. Explain the effects on savings, investment, and the (neutral) real interest rate. a) The government runs a government budget surplus instead of a deficit. b) The government decides to forgive some of the $66 billion in student loan debt. c) Chinese investors stop sending their funds to Australia, reducing net capital inflows. d) The nominal interest rate rises 1% in response to a 1% rise in the inflation rate.

For parts a)-d), evaluate the effect of each of the following events on the market for loanable funds. Explain the effects on savings, investment, and the (neutral) real interest rate. a) The government runs a government budget surplus instead of a deficit. b) The government decides to forgive some of the $66 billion in student loan debt. c) Chinese investors stop sending their funds to Australia, reducing net capital inflows. d) The nominal interest rate rises 1% in response to a 1% rise in the inflation rate.

ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
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Please help me with D, E,F

Question 3 For parts a)-d), evaluate the effect of each of the following events on the market for loanable funds. Explain the effects on savings, investment, and the (neutral) real interest rate. a) The government runs a government budget surplus instead of a deficit. b) The government decides to forgive some of the $66 billion in student loan debt. c) Chinese investors stop sending their funds to Australia, reducing net capital inflows. d) The nominal interest rate rises 1% in response to a 1% rise in the inflation rate. Briefly compare the impact of the global financial crisis (GFC) in the US in 2007- 2009 to other U.S. recessions since 1950. Why did household consumption in the US fall during this recession, unlike in previous recessions? ŵ
Transcribed Image Text:Question 3 For parts a)-d), evaluate the effect of each of the following events on the market for loanable funds. Explain the effects on savings, investment, and the (neutral) real interest rate. a) The government runs a government budget surplus instead of a deficit. b) The government decides to forgive some of the $66 billion in student loan debt. c) Chinese investors stop sending their funds to Australia, reducing net capital inflows. d) The nominal interest rate rises 1% in response to a 1% rise in the inflation rate. Briefly compare the impact of the global financial crisis (GFC) in the US in 2007- 2009 to other U.S. recessions since 1950. Why did household consumption in the US fall during this recession, unlike in previous recessions? ŵ
Below is a table with US labour market data (in thousands): 1998 Working-age population 205, 220 Population 276, 154 Unemployed Employed 6, 204 131,464 2008 2018 233,788 257, 791 304,543 327, 436 8,948 6,306 145, 363 155, 761
Transcribed Image Text:Below is a table with US labour market data (in thousands): 1998 Working-age population 205, 220 Population 276, 154 Unemployed Employed 6, 204 131,464 2008 2018 233,788 257, 791 304,543 327, 436 8,948 6,306 145, 363 155, 761
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