(Percent)217109800SupplyDemand100 200 300 400 500 600 700 800.LOANABLE FUNDS (Billions of dollars)900 1000is the source of the supply of loanable funds. As the interest rate falls, the quantity of loanable funds suppliedthan the quantity of loansSuppose the interest rate is 4.5%. Based on the previous graph, the quantity of loanable funds supplied is,demanded, resulting in aof loanable funds. This would encourage lenders tothe interest rates they charge, therebythe quantity of loanable funds supplied and,the quantity of loanable funds demanded, moving the market towardthe equilibrium interest rate of%

Savings is the source of the supply of loanable funds. As the interest rate falls, the quantity of…

Answered: (Percent) 2 1 7 10 9 8 0 0 Supply…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question 35 Suppose real estate analysts expect that 100,000 homes will be needed in a particular community by 2014. If the current number of homes in the community is only 50,000, we can expect to see a significant increase in the demand for investment. True O False
Economics The table shows an economy's demand for loanable funds schedule and supply of loanable funds schedule when the government's budget is balanced Real interest rate Loanable funds demanded Loanable funds supplied (percent per year) (trillions of 2010 dollars) (trillions of 2010 dollars) 3 12 6 11 10 9 9 7 8 10 11 If the Ricardo-Barro effect occurs, and if the government budget deficit is $2 trillion, the real interest rate is percent year and the quantity of investment is trillion. O A. 7.0, $8.0 O B. 7.0; $10 0 OC. 5.0; $10.0 OD. 6.0, $9.0
Using the following information, what is the amount of gross profit? $33,779 6,886 576 551 Purchases Merchandise inventory, September 1 Administrative expenses Rent revenue Oa. $86,957 Ob. $24,048 Oc. $55,982 Od. $25,007 Selling expenses Merchandise inventory, September 30 Sales Interest expense
) A college is considering investing $6 million to add 10,000 seats to its football stadium. The athletic department forecasts it can sell all these extra seats at each game for a ticket price of $20 per seat, and the team plays six home games per year. If the school can borrow at an interest rate of 14%, should the school undertake this project? (Show your math!) What would happen if the school expected a losing season and could sell tickets for only 5,000 of the seats?
5. The market for loanable funds and government policy The following graph shows the loanable funds market. For each of the given scenarios, adjust the appropriate curve on the graph to help you complete the questions that follow. Consider each scenario separately by returning the graph to its starting position when moving from one scenario to the next. (Note: You will not be graded on any changes you make to the graph.) INTEREST RATE (Percent) Supply LOANABLE FUNDS (Billions of doll Demand -0- Demand 10 Supply
Economy 1. Pamela worked as an auditor earning $60,000 per annum. She decided to open her own consultancy business. For her business, she rents an office where she pays $2,000 per annum. Further, her utility expenses are $300 per annum and she hired a part-time secretary to whom she pays $25,000 per annum. To start her business, she borrowed $40,000 from her savings, where she was earning an interest of $500 per annum. In her first year, her business earned a revenue of $300,000. Based on this information, calculate the following: a. Total implicit costs per annum b.Total explicit costs per annum c.Total accounting costs and accounting profit for that year d.Total economic costs and economic profit for that year
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6. Tax systems and saving This question addresses the impact of saving on an economy by examining what happens if tax laws change to induce saving and how changes in tax laws can discourage saving. The following graph shows the market for loanable funds. Show the impact of a change in the tax law that successfully encourages saving by shifting either the demand curve (D), the supply curve (S), or both. INTEREST RATE LOANABLE FUNDS S 6.4. (?)
5. The market for loanable funds and government policy The following graph shows the market for loanable funds. For each of the given scenarios, adjust the appropriate curve on the graph to help you complete the questions that follow. Treat each scenario separately by resetting the graph to its original state before examining the effect of each individual scenario. (Note: You will not be graded on any changes you make to the graph.) INTEREST RATE (Percent) Supply Demand LOANABLE FUNDS (Billions of dollars) Demand Supply (?) Scenario 1: Individual Retirement Accounts (IRAS) allow people to shelter some of their income from taxation. Suppose the maximum annual contribution to such accounts is $5,000 per person. Now suppose there is a decrease in the maximum contribution, from $5,000 to $3,000 per year.
4. The market for loanable funds and government policy The following graph shows the loanable funds market. For each of the given scenarios, adjust the appropriate curve on the graph to help you complete the questions that follow. Consider each scenario separately by returning the graph to its starting position when moving from one scenario to the next. (Note: You will not be graded on any changes you make to the graph.) Supply 17 INTEREST RATE (Percent) LOANABLE FUNDS (Billions of dollars) Demand Scenario 1: Suppose savers either buy bonds or make deposits in savings accounts at banks. Initially, the interest income earned on bonds or deposits is taxed at a rate of 18%. Now suppose there is an increase in the tax rate on interest income, from 18% to 22%. Shift the appropriate curve on the graph to reflect this change. The repeal of the previously existing tax credit causes the interest rate to Shift the appropriate curve on the graph to reflect this change. This change in the tax…
a. Assume that the government borrows $4 billion to pay for its increased purchases. Adjust the graph below to reflect this change. Be sure to indicate the new market equilibrium. Interest Rate (percent) 10 9 8 7 2 1 0 Incorrect 0 Market for Loanable Funds E National saving, S(r) 6 2 4 8 10 12 14 Loanable Funds (in billions of dollars) 16 18 Investment, I(r) 20

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