Interest rate (percent) E Supply of loanable funds Demand for loanable funds Quantity of loanable funds per period (trillions of dollars) in this market for loanable funds, what would happen if the interest rate suddenly fell below re? O a. The number of people looking for loans that cannot get a loan would increase. Ob. The number of people looking for loans that cannot get a loan would decrease Oc. Loans would be cheaper, and everyone who needs a loan would get one. Od. Loans would be more expensive, and many people who need a loan would not be able to get one

Interest rate (percent) E Supply of loanable funds Demand for loanable funds Quantity of loanable funds per period (trillions of dollars) in this market for loanable funds, what would happen if the interest rate suddenly fell below re? O a. The number of people looking for loans that cannot get a loan would increase. Ob. The number of people looking for loans that cannot get a loan would decrease Oc. Loans would be cheaper, and everyone who needs a loan would get one. Od. Loans would be more expensive, and many people who need a loan would not be able to get one

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Complete the following statements. a. Dan saves a portion of his income in an interest-earning account. In the loanable funds market, Dan is b. John owns a pizzeria and needs to borrow money for a new oven. In the loanable funds market, John is c. Savers like Dan are likely to save more when the real interest rate . Therefore, the supply of loanable funds Look at images for word bank . d. Borrowers like John are likely to borrow more when the real interest rate . Therefore, the demand for loanable funds .
5. Use this information for the following questions. In 2019, the cost of tuition at a community college was $384 per credit hour. The school plans the cost of tuition to rise up to $442 per credit hour in 2022. Round to two decimal places for all parts of this problem. a. Find the rate of change of the cost of tuition during this time span, write answer as a decimal. b. Write a formula for the cost of tuition as a function of the number of years since 2019.
(a) U.S. (b) U.K. Interest rate Interest rate Supply 6% EA 4 Demand Quantity of loanable funds 4% 2 EB Supply Demand Quantity of loanable funds Given the loanable funds market graphs above, explain what will happen in the: 。 UK-| US
In the loanable funds market, if firms become more optimistic about future profitability, then the a demand for loanable funds will increase, interest rates will increase, and private sector investment spending will increase. b demand for loanable funds will decrease, interest rates will decrease, and the equilibrium quantity of borrowing will decrease. c supply of loanable funds will increase, interest rates will decrease, and the equilibrium quantity of borrowing will increase. d supply of loanable funds will increase, interest rates will increase, and private sector investment spending will increase.
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all else equal, what does a lower interest rate mean for firms? what does a lower interest rate means for savers?
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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.
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?
What must have happened in the loanable funds market to produce the 2020 level of interest rates what caused this change?
Q: Draw a graph depicting the market for loanable funds and analyze the impact of open market operations when the interest rate is at or near the zero lower bound. a. Illustrate the supply and dem and for loanable funds, labeling the supply curve (S), the demand curve (D), and the initial equilibrium interest rate and quantity of loanable funds. b. Show the effect of open market operations on the supply of loanable funds, and analyze its impact on the price of loanable funds.c. Introduce a situation in which the market for loanable funds faces the zero lower bound (it may be easiest to draw a new graph for this for the purpose of clarity). d. Explain how open market operations typically influence the supply of loanable funds and interest rates in normal circumstances. e. Discuss why these operations become less effective when the interest rate is at or near the zero lower bound.
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