Real interest rate 6%-- 5 4 3 2 1 0 30 Select one: O O 60 90 120 150 a. supply; rise; decreasing; increasing b. supply; fall; increasing; decreasing c. demand; fall; decreasing; decreasing d. demand; rise; increasing; decreasing 180 ន D will. Refer to Figure 10-6. The loanable funds market is in equilibrium, as shown in the figure above. As a result of an increase in the government budget deficit, the thereby______ the equilibrium real interest rate and _ the equilibrium quantity of loanable funds. Quantity of loanable funds (millions of dollars) for loanable funds

Real interest rate 6%-- 5 4 3 2 1 0 30 Select one: O O 60 90 120 150 a. supply; rise; decreasing; increasing b. supply; fall; increasing; decreasing c. demand; fall; decreasing; decreasing d. demand; rise; increasing; decreasing 180 ន D will. Refer to Figure 10-6. The loanable funds market is in equilibrium, as shown in the figure above. As a result of an increase in the government budget deficit, the thereby______ the equilibrium real interest rate and _ the equilibrium quantity of loanable funds. Quantity of loanable funds (millions of dollars) for loanable funds

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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8. Given the following information: C = Ca + 0.8Yd Ip = 1900 - 40r G = 1800 NX = 700 - 0.14Y %D T= 200 + 0.20 Y Ca = 260 - 1Or Md/P = 0.25Y - 25r Ms/P = 2000 Find: 1. The equilibrium level of interest rate and output. 2. If Government expenditure increased by 100, find the new equilibrium level of interest rate and output
Suppose that the demand for loanable funds for car loans in the Milwaukee area is $12 million per month at an interest rate of 1O percent per year, $13 million at an interest rate of 9 percent per year, $14 million at an interest rate of 8 percent per year, and so on. If the supply of loanable funds is fixed at $18 million, what will be the equilibrium interest rate? Instructions: Enter your answer as a whole number. percent per year
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4. Does the I in C+I+ G Nx include purchases of stocks and bonds? Why or why not? Lo2 t nnmnonent of I in
The table below shows levels of employment, output, consumption, and saving for a private closed economy. Possible Levels Real Domestic of Employment, Consumption, Billions Saving, Output, Billions Millions Billions 35 $230 $239 -$9 40 250 255 -5 45 270 271 -1 50 290 287 3 55 310 303 7 60 330 319 11 65 350 335 15 70 370 351 19 75 390 367 23 Instructions: Enter your answers as a whole number. If you are entering any negative numbers be sure to include a negative sign (-) in front of those numbers. Using the consumption and saving data above and assuming planned investment is $19 billion, answer the following questions: a. What are saving and planned investment at the $390 billion level of domestic output? Saving = $ billion Investment = $ billion b. What are saving and actual investment at that level? Saving = $ billion Investment = $ billion c. What are saving and planned investment at the $350 billion level of domestic output? Saving = $ billion Investment = $ billion d. What are the…
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The diagram below show the market for financial capital assuming that national income is constant at potential GDP, Y*. Real Interest Rate I EL ME 14 FIGURE 25-2 NSO I 11 12 13 NS1 1 1 Quantity of Investment and Saving ($) Refer to Figure 25-2. Suppose national saving is reflected by NS, and investment demand is reflected by lo. Now suppose the government implements a revenue-neutral tax policy that encourages investment. What is the effect on the real interest rate? Select one: O a. There is no effect on NS or ID, and the interest rate remains at i*. O b. The real interest rate rises because of the decrease in the budget surplus. O C. National saving shifts to NS₁, and the real interest rate falls to i3. O d. Investment demand shifts to 1₁D, and the real interest rate rises to i₂. O e. The real interest rate falls because of the decrease in the budget surplus.
Figure 26-3. The figure shows two demand-for-loanable-funds curves and two supply-of-loanable-funds curves. B o A F S₁ D2 D1 Refer to Figure 26-3. Which of the following movements shows the effects of the government going from a budget deficit to a budget surplus? OA. a movement from Point A to Point B OB. a movement from Point B to Point A OC. a movement from Point A to Point F OD. a movement from Point C to Point B
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