Related to the Economics in Practice on p. 156: According to the "paradox of thrift," as individuals increase their saving, Select one: income in the economy will remain constant because the change in consumption equals the change in saving. O a. O b. income in the economy increases because interest rates will fall and the economy will expand. O c. income in the economy will fall because the decreased consumption that results from increased saving causes the economy to contract. O d. income in the economy increases because there is more money available for firms to invest.

Related to the Economics in Practice on p. 156: According to the "paradox of thrift," as individuals increase their saving, Select one: income in the economy will remain constant because the change in consumption equals the change in saving. O a. O b. income in the economy increases because interest rates will fall and the economy will expand. O c. income in the economy will fall because the decreased consumption that results from increased saving causes the economy to contract. O d. income in the economy increases because there is more money available for firms to invest.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Similar questions

What name is given to the maximum quantity that an economy can produce given its existing levels of labor, physical capital, technology, and institutions? O O Potential GDP Cheese The Wealth Effect The Interest Rate Effect
An article in the Wall Street Journal on the housing market states that "Steady job growth, rising wages and low interest rates have helped prop up housing demand." Source: Steven Russolillo, "Why the Housing Market is Getting Stronger," Wall Street Journal, May 22, 2016. Why do low interest rates increase the demand for housing? O A. The lower the interest rate, the less expensive it is for households to borrow money. O B. The lower the interest rate, the lower the price that sellers are willing to accept for their home. O C. When interest rates are low, the supply of housing increases. O D. Lower interest rates induce consumers to save more money for future home purchases. In the official government National Income and Product Accounts (NIPA), what component of investment includes purchases of new houses? O A. "Actual investment" OB. "Inventories" OC. "Plant and equipment" O D. "Residential"
Figure 32-1 percent 8 10 20 30 40 50 60 70 $billions Refer to Figure 32-1. In the Figure shown, if the real interest rate is 6 percent, the quantity of loanable funds demanded is O A. $20 billion, and the quantity supplied is $40 billion. O B. $20 billion, and the quantity supplied is $60 billion. O C. $60 billion, and the quantity supplied is $20 billion. O D. $60 billion, and the quantity supplied is $40 billion.
Which of the following is not an argument by those who oppose tax-law changes to encourage saving? O A. Saving is not very responsive to changes in the tax rate. O B. Saving is not an important determinant of a nation's ability to produce output. OC. Reducing the budget deficit instead of changing the tax laws could raise saving. O D. Changes in the tax laws to induce saving would distribute the tax burden less fairly.
The following graph shows the market for loanable funds in a closed economy. The upward-sloping orange line represents the supply of loanable funds, and the downward-sloping blue line represents the demand for loanable funds. 10 Supply 8 Demand 100 200 300 400 500 600 700 800 900 1000 LOANABLE FUNDS (Billions of dollars) is the source of the supply of loanable funds. As the interest rate falls, the quantity of loanable funds supplied increases v Suppose the interest rate is 4.5%. Based on the previous graph, the quantity of loanable funds supplied is v than the quantity of loans demanded, resulting in a v of loanable funds. This would encourage lenders to v the interest rates they charge, thereby v the quantity of loanable funds supplied and v the quantity of loanable funds demanded, moving the market toward the equilibrium interest rate of 5% . INTEREST RATE (Percent)