Show the effect on the real interest rate and equilibrium quantity of loanable funds of an increase in the demand forloanable funds and a smaller increase in the supply of loanable funds.Draw a demand for loanable funds curve. Label it DLF.Draw a supply of loanable funds curve. Label it SLF.Draw a point at the equilibrium real interest rate and quantity of loanable funds. Label it 1.Real interest rate (percent per year)12.0Draw a curve that shows an increase in the demand for loanable funds. Label it DLF,.10.0-Draw a curve that shows a smaller increase in the supply of loanable funds. Label it SLF,.Draw a point at the new equilibrium real interest rate and quantity of loanable funds. Label it 2.8.0-6.0-4.0-2.0-0.0+0.01.02.03.0Loanable funds (trillions of 2012 dollars)4.05.0>>> Draw only the objects specified in the question.Click the graph, choose a tool in the palette and follow the instructions to create your graph.MacBook AirDDDIIF11F10F9000000F8F7吕0F6F5F4F3F2escF1&#78.45231YWEQKFGDM%24

Loanable funds market is basically a kind of place where borrowing and lending takes place. The…

Show the effect on the real interest rate and equilibrium quantity of loanable fUkds loanable funds and a smaller increase in the supply of loanable funds. 12.0 Draw a demand for loanable funds curve. Label it DLF. Draw a supply of loanable funds curve. Label it SLF Draw a point at the equilibrium real interest rate and quantity of loanable funds. Label it 1. 10.0- 8.0- Draw a curve that shows an increase in the demand for loanable funds. Label it DLF,. Draw a curve that shows a smaller increase in the supply of loanable funds. Label it SLF,. 6.0 Draw a point at the new equilibrium real interest rate and quantity of loanable funds, Label it 2. 4.0- 2.0- 0.0t 20 40 10 00 Loanable unds (trillions of 2012 dollars) >> Draw only the objects specified in the question

Show the effect on the real interest rate and equilibrium quantity of loanable fUkds loanable funds and a smaller increase in the supply of loanable funds. 12.0 Draw a demand for loanable funds curve. Label it DLF. Draw a supply of loanable funds curve. Label it SLF Draw a point at the equilibrium real interest rate and quantity of loanable funds. Label it 1. 10.0- 8.0- Draw a curve that shows an increase in the demand for loanable funds. Label it DLF,. Draw a curve that shows a smaller increase in the supply of loanable funds. Label it SLF,. 6.0 Draw a point at the new equilibrium real interest rate and quantity of loanable funds, Label it 2. 4.0- 2.0- 0.0t 20 40 10 00 Loanable unds (trillions of 2012 dollars) >> Draw only the objects specified in the question

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Use the loanable funds market to illustrate the effect of the following events on the equilibrium. Illustrate the effects on the interest rate and quantity of investment-savings a) The proportion of retired people in the population goes up. Think that usually retired people generally save less than working people at any interest rate. b) At any given interest rate, consumers decide to save more (assume the budget balance is zero). c) At any given interest rate, businesses become very optimistic about the future profitability of investment spending (assume the budget balance is zero).
Tax systems and saving
First Call Inc. is a cellular phone company. It plans to build an assembly plant that costs $10 million if the real interest rate is 6% a year. If the real interest rate is 5% a year, First Call Inc. will build a larger plant that costs $12 million. And if he real interest rate is 7% a year, First Call will build a smaller plant that costs $8 million. a. Draw a graph of First Call’s demand for loanable funds curve. b. First Call expects its profit from the sale of cellular phones to double next year. If other things remain the same, explain how this increase in expected profit influence it’s demand for loanable funds
C wrong
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. Supply 5 Demand 1 100 200 300 400 500 600 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 Suppose the interest rate is 3.5%. Based on the previous graph, the quantity of loanable funds supplied is than the quantity of loans ▼ of loanable funds. This would encourage lenders to the interest rates they charge, thereby demanded, resulting in a the quantity of loanable funds supplied and the quantity of loanable funds demanded, moving the market toward 0% the equilibrium interest rate of INTEREST RATE (Percent)
d. A reduction in the cost of acquiring new physical capital creates many new profitable opportunities for firms. The Loanable Funds Market Interest rate This will: Quantity of dollars Interest rate This will: I Oraise the equilibrium interest rate and decrease the quantity of funds saved and invested. raise the equilibrium interest rate and increase the quantity of funds saved and invested. lower the equilibrium interest rate and decrease the quantity of funds saved and invested. lower the equilibrium interest rate and increase the quantity of funds saved and invested. e. The government decides to increase government purchases (G), which increases the size of the budget deficit. 0 The Loanable Funds Market Quantity of dollars S I O S Ø Oraise the equilibrium interest rate and increase the quantity of funds saved and invested. O raise the equilibrium interest rate and decrease the quantity of funds saved and invested. Olower the equilibrium interest rate and decrease the quantity of…
The following figure plots real interest rate against quantity of credit. Real interest rate (%) S, A B. S, D, D, Quantity of credit ($) Refer to the figure above. Assume that the loanable funds market initially is in equilibrium at point D. What has to be true for the new equilibrium to be at point A? O The inflation rate must increase. Companies' or individuals' savings must decrease. O Companies' or individuals' investments must decrease. O The demand of credit must not shift.
PLEASE ANSWER ALL QUESTIONS NOT JUST SOME PLEASE WRITE THE EXACT NUMBERS FOR THE GRAPH. PLEASE READ CAREFULLY, THIS MAY BE A SIMILAR QUESTION, BUT ALL QUESTIONS ARE DIFFERENT
5. The government of an economy has increased its spending and its taxes by the same amount. i) What is the effect on investment? Use loanable funds market framework to illustrate your answer graphically and explain in words. ii) Does higher marginal propensity to consume amplify this effect or not? Explain your answer analytically. 2nd time submitting as a post, please answer this problem fully and explain work. Please answer graphically and use words as prescribed Please explain results fully. Use graph please as well. The first time I submitted this I was given a partial answer that I believe to be inaccurate for merely half the problem and that used no graph. Macmillan macroeconomics textbook is a good reference.
Consider the market for loanable fund. Suppose that government started to give tax incentives for investment (so the cost of investment fell.) Answer which curve (Demand or Supply) would shift to which direction (Left or Right), and answer how the equilibrium saving would change (Decrease or Increase)Curve: Direction: Saving:
a. Consider the Market for Loanable Funds in a closed economy. What would be the impacts of the following events on interest rates and investment. i. The government introduces a tax credit for savings accounts of up to $10,000 per year. ii. The government introduces a tax credit for savings accounts of up to $10,000 per year, and at the same time it repeals an investment tax exemption provision. iii. The government raises the tax rates. iv. The government issues bonds worth $10 billion. b. In a closed economy GDP = $1,400, private saving = $225, government budget deficit = $15, and government spending $25 (all numbers are in billions). Calculate national saving, taxes, and consumption. %3D
3. The meaning of saving and investment Classify each of the following scenarios listed in the table below using the macroeconomic definitions of saving and investment. Maria buys a new crane for her construction firm. Simone purchases shares of stock in Warm Breeze, a cloud computing company. Rajiv takes out a loan and uses it to build a new cabin in Idaho. Kevin purchases a corporate bond issued by an automotive firm. Saving O Investment