nterest Rate Qty. supplied Qty. demanded 5% 130 170 6% 135 150 7% 140 140 8% 145 135 9% 150 125 10% 155 110 The table above shows the amount of savings and borrowing in a market for loans to purchase homes, measured in millions of dollars, at various interest rates. What is the equilibrium interest rate and quantity in the capital financial market? Describe how you can tell? Now, imagine that because of a shift in the perceptions of foreign investors, the supply curve shifts so that there will be $10 million less supplied at every interest rate level. Calculate the new equilibrium interest rate and quantity and explain why the direction of the interest rate shift makes sense.
nterest Rate Qty. supplied Qty. demanded 5% 130 170 6% 135 150 7% 140 140 8% 145 135 9% 150 125 10% 155 110 The table above shows the amount of savings and borrowing in a market for loans to purchase homes, measured in millions of dollars, at various interest rates. What is the equilibrium interest rate and quantity in the capital financial market? Describe how you can tell? Now, imagine that because of a shift in the perceptions of foreign investors, the supply curve shifts so that there will be $10 million less supplied at every interest rate level. Calculate the new equilibrium interest rate and quantity and explain why the direction of the interest rate shift makes sense.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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| Interest Rate | Qty. supplied | Qty. demanded |
| 5% | 130 | 170 |
| 6% | 135 | 150 |
| 7% | 140 | 140 |
| 8% | 145 | 135 |
| 9% | 150 | 125 |
| 10% | 155 | 110 |
The table above shows the amount of savings and borrowing in a market for loans to purchase homes, measured in millions of dollars, at various interest rates. What is the equilibrium interest rate and quantity in the capital financial market? Describe how you can tell? Now, imagine that because of a shift in the perceptions of foreign investors, the supply curve shifts so that there will be $10 million less supplied at every interest rate level. Calculate the new equilibrium interest rate and quantity and explain why the direction of the interest rate shift makes sense.
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