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

Q: Dear Sir/Madam while studying for my macroeconomics course, I came across this case study that I am…

A: Answer: In an open economy, national saving (S) is equal to the sum of investment (I) and current…

Q: Which would be considered an investment according to economists? The purchase of newly-issued shares…

A: According to an Economist, Investment is capital formation when the individual allocates his/her…

Q: briefly explain why the Federal Reserve's policies of quantitative easing and maintaining low…

A: The Federal Reserve System - America's national bank is the primary policymaking institution accused…

Q: What happens to interest rates in the market when bond prices fluctuate a lot

A: Bond price:- Bond price can be explained as discounted present value of a bond's anticipated cash…

Q: Complete the following sentence to explain how a U.S. importer who has to pay 23,000 pounds in three…

A: Hedging exchange rate risk is a risk management strategy that businesses and individuals use to…

Q: QUESTION 28 Which of the following box(es) contain(s) the items that often require the government to…

A: An externality occurs from the consumption or production of a good or service, and causing in a…

Q: Which of the following was an underlying cause of the economic crisis of 2008? a. The imposition of…

A: Conventional lending standards had started to erode since the 1990s.

Q: the maintenance costs associated with an investment are 100,000,000 for the first 10 years and…

A: To calculate the present worth of the annual disbursement, we need to consider the two different…

Q: What does a managed (or dirty) float mean? That the country's central bank fixes the value of its…

A: A central bank is a public institution that is accountable for implementing monetary policy,…

Q: Briefly explain the benefits of having a thriving capital markets even in an economy like India…

A: Capital market is a platform where organizations enter as a borrower because they need money to…

Q: Suppose that people in France decide to permanently increase their savings rate. Predict what will…

A: An amount that is being set aside by individuals for their future consumption is known as savings.…

Q: A country reduces its government budget deficit and also makes political reforms that lead people to…

A: If a country is having a lower deficit then its demand for funds falls to cover the deficit. This…

Q: Write about one of the sources of capital receipts

A: Let us first understand what are capital receives.  If there is a reduction in the assets of the…

Q: (1) Suppose you just bought a treasury bill for $965 that matures in three months (91 days), and has…

A: ***Since the student has posted multiple questions, hence, the expert is required to solve only the…

Q: Consider the following equation log(gdp) = 2.65 +0.527 log(bankcredit) + 0.222FDI, where gdp refers…

A: Here we are given the multiple linear regression model where we have 1 dependent variable and 2…

Q: Financial institutions such as banks pays lower interest rates to depositors and charge higher…

A: Democratic government is a type of government in which there is both public and private sector…

Q: Responding to the economic conditions in the United Kingdom in 1932, Friedrich Hayek and his…

A: Economic conditions describe the state of the economy during a specific time period, taking into…

Q: After the global financial crisis, there has been a heated debate about whether the sluggish…

A: (Q)After the global financial crisis, there has been a heated debate about whether the sluggish…

Q: Were low interest rates the underlying cause of the financial crisis? In the previous unit, we…

A: The financial crisis of 2007-2008 had been building for years. By the summer of 2007, financial…

Q: Suppose that the market interest rate in an economy is 7 percent and a bond promises to pay $615…

A: The present value is a financial concept that refers to the current worth of a future sum of money,…

Q: ead the following premise carefully and answer the questions specifically and in detail: "Financial…

A: Adjusted for inflation, the real interest rate. this rate of return is the return on the savers’…

Q: Suppose that Dmitri, an economist from a research institute in Texas, and Frances, an economist from…

A: We will answer the first question since the exact one was not specified. Please submit a new…

Q: If people are willing to save more money in “banks,” how will this market be affected? (i.e., which…

A: This question is about the loanable funds market, which is a model used to represent the market for…

Q: We saw that former Federal Reserve Chairman Ben Bernanke argued that w interest rates in the United…

A: The Federal Reserve supervises financial system risks and involves at home and abroad to help make…

Q: If the supply of financial capital increases   Interest rates will remain unchanged.   Interest…

A: Interest rate is determined by the demand and supply of financial capital.

Q: What happens to net capital outflow as the real interest rate falls? Explain your answer.

A: Net capital outflow is the net flow of funds being invested abroad by a country during a certain…

Q: Figure 1. On the horizontal axis of the graph, L represents the quantity of loanable funds in…

A: Demand for loanable funds implies the firm's and individual's borrowing for the investment purposes.…

Q: borrowing in a market for loans to purchase homes, measured in millions of dollars, at various…

A: Market is at equilibrium where demand  for loan and supply of loan equal  at certain interest rate…

Q: If people worry about the United States defaulting on the national debt, what would you expect to…

A: The interest rates on Treasury securities are referred to as treasury yield. It is the rate of…

Q: Changes in the money supply affect the interest rate through changes in the supply of loans, real…

A: Loanable funds is defined as the theory for determining rate of interest in the market. The demand…

Q: 4. Inflation and interest rates The following table shows the average nominal interest rates on…

A: Nominal interest rate alludes to the interest rate prior to considering expansion. Nominal can…

Q: In crisis periods such as 1975 and 2008-2010, we observe large increases in government budget…

A: A crisis period refers to the time period in which an economy is facing a downturn in economic and…

Q: Although we stated that real assets comprise the true productive capacity of an economy, it is hard…

A: Question require an answer what happen In economy if there is no financial market. Let start…

Q: From our discussion of interest rate frameworks, we can guess that the demand for liquidity is…

A: Liquidity refers to the flow of money into the economy which increased when the banks lower the rate…

Q: Suppose that the graph below represents the market for financial capital in Palau. How does an…

A: Budget deficits are a major component of budgeting and economic administration. This is because they…

Q: Question 8 The market for loanable funds in country 1 is described by the equations I = 18 - 6r and…

A: The investment has a negative relationship with interest rate .Rise in interest rate will increase…

Q: In the long run, what happens to interest rates when the government increases taxes in closed…

A: Note:- My dear student, as per bartleby guidelines I have done only one answer at a time. Please…

Q: 31. Table 4.6 shows the amount of savings and borrowing in a market for loans to purchase homes,…

A: Market is said to be in equilibrium when the demand is equal to supply. The point where the market…

Q: After the budget deficit occurs, suppose the new equilibrium real interest rate is 6%. The following…

A: International Capital mobility is a very common phenomena which occurs in these times of globalized…

Q: Suppose that the market interest rate in an economy is 9 percent and a bond promises to pay $735…

A: Present value is the value of investment in today's dollar.  Future value is the value of investment…

Q: The following graphs depict the market for loanable funds and the relationship between the real…

A: The equilibrium situation in the foreign exchange market is determined where the foreign exchange…

Q: The following graph shows the loanable funds market. For each of the given scenarios, adjust the…

A: Loanable Funds Market: In the market for loanable funds there are economic agents like governments,…

Q: Choose the best answer in the brackets  1) According to the loanable funds theory, a decrease in…

A: In the classical model, the loanable funds market determines the equilibrium interest rate and the…