Suppose a hypothetical open economy uses the U.S. dollar as currency. The table below presents data describing the relationship between differentreal interest rates and this economy's levels of national saving, domestic investment, and net capital outflow. Assume that the economy is currentlyoperating under a balanced government budget.Real Interest Rate(Percent)7REAL INTEREST RATE108w250 In06543 N2National Saving(Billions of dollars)55504540203530Given the information in the table above, use the blue points (circle symbol) to plot the demand for loanable funds. Next, use the orange points(square symbol) to plot the supply of loanable funds. Finally, use the black point (cross symbol) to indicate the equilibrium in this market.?Market for Loanable Funds4060QUANTITY OF LOANABLE FUNDSDomestic Investment(Billions of dollars)25358045100556575Demand-0-Net Capital Outflow(Billions of dollars)-10-5Supply+05Equilibrium1015 On the following graph, plot the relationship between the real interest rate and net capital outflow by using the green points (triangle symbol) to plotthe points from the initial data table. Then use the black point (X symbol) to indicate the level of net capital outflow at the equilibrium real interestrate you derived in the previous graph.REAL INTEREST RATE-20Net Capital Outflow-510862+-15-100510NET CAPITAL OUTFLOW (Billions of dollars)1520ANCOEqm. NCO?Because of the relationship between net capital outflow and net exports, the level of net capital outflow at the equilibrium real interest rate impliesthat the economy is experiencingNow, suppose the government is experiencing a budget deficit. This means thatloanable funds.Lwhich leads toAfter the budget deficit occurs, suppose the new equilibrium real interest rate is 7%. The following graph shows the demand curve in the foreign-currency exchange market.

Capital outflow is an economic expression explaining capital flowing out of a specific economy.…

ppose a hypothetical open economy uses the U.S. dollar as currency. The table below presents data describing the relationship between di al interest rates and this economy's levels of national saving, domestic investment, and net capital outflow. Assume that the economy is c erating under a balanced government budget. Real Interest Rate (Percent) 7 6 54 10 3 2 National Saving (Billions of dollars) 55 50 45 40 35 30 Domestic Investment (Billions of dollars) 25 35 Market for Loanable Funds 45 55 65 75 。 Net Capital Outflow (Billions of dollars) -10 Demand Supply ven the information in the table above, use the blue points (circle symbol) to plot the demand for loanable funds. Next, use the orange po quare symbol) to plot the supply of loanable funds. Finally, use the black point (cross symbol) to indicate the equilibrium in this market. non99 Equilibrium -5 5 10 15

ppose a hypothetical open economy uses the U.S. dollar as currency. The table below presents data describing the relationship between di al interest rates and this economy's levels of national saving, domestic investment, and net capital outflow. Assume that the economy is c erating under a balanced government budget. Real Interest Rate (Percent) 7 6 54 10 3 2 National Saving (Billions of dollars) 55 50 45 40 35 30 Domestic Investment (Billions of dollars) 25 35 Market for Loanable Funds 45 55 65 75 。 Net Capital Outflow (Billions of dollars) -10 Demand Supply ven the information in the table above, use the blue points (circle symbol) to plot the demand for loanable funds. Next, use the orange po quare symbol) to plot the supply of loanable funds. Finally, use the black point (cross symbol) to indicate the equilibrium in this market. non99 Equilibrium -5 5 10 15

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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ces Price Level 128 125 122 119 116 C $ 18 20 22 24 26 Ig $2 4 6 8 Multiple Choice 10 G $ 3 3 3 3 3 Price Level and Gin the table. X and M in the table. In the accompanying table for a particular country, C is consumption expenditures, Ig is gross investment expenditures, Gi X is exports, and M is imports. All figures are in billions of dollars. The interest-rate effect of changes in the price level is sh Price Level and Ig in the table. Cand Gin the table. X $1 2 3 4 5 M $5 4 3 2 1 Real GDP Note:- Please avoid using ChatGPT and refrain from providing handwritten solutions; otherwise, I will definitely give a downvote. Also, be mindful of plagiarism. Answer completely and accurate answer. Rest assured, you will receive an upvote if the answer is accurate.
Suppose a country experiences symptoms of the Dutch Disease. Which of the following policies could help to protect the economy? O Discouraging high rates of saving O Helping particular companies or industries
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4. Suppose gross saving in the United States is 20 percent of Gross National Product (GNP). a. If business saving is 15 percent of GNP and government saving is 4 percent of GNP, what percent of GNP is personal saving?b. Explain why a federal budget surplus increases national saving while a budget deficit decreases national saving.c. How can a federal budget deficit increase market equilibrium interest rates and reduce private investment and future economic growth?
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Which group is most likely to demand funds from the financial (loanable funds) market? O financial institutions who lend funds to people. O the government when they run a budget surplus. O firms who want to borrow to pay for new capital. O people who have extra income they want to save. « Previous Next ASUS 16 5 6 7 R
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Currently, the US has a total consumption of $12 trillion, saving of $6 trillion, tax revenues of $5 trillion, and government spending of $7 trillion. Relative to a balanced budget, the government’s actions in this economy will cause: a. Higher interest rates today and reduced economic growth for future generations. b. Lower interest rates today and reduced economic growth for future generations. c. Higher interest rates today and enhanced economic growth for future generations. d. Lower interest rates today and enhanced economic growth for future generations.