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.**Graph Explanation:**- The graph is plotted with the vertical axis labeled "INTEREST RATE (Percent)" ranging from 0 to 12, and the horizontal axis labeled "LOANABLE FUNDS (Billions of dollars)" ranging from 0 to 1200.- The intersection point of the supply and demand curves is marked at (600, 6), indicating the equilibrium point where the interest rate is 6% and the quantity of loanable funds is 600 billion dollars.- The supply of loanable funds line is orange and upward-sloping, indicating that as the interest rate rises, the quantity of funds supplied increases.- The demand for loanable funds line is blue and downward-sloping, indicating that as the interest rate rises, the quantity of funds demanded decreases.**Text:**(___________) is the source of the supply of loanable funds. As the interest rate rises, the quantity of loanable funds supplied (___________) (___________).Suppose the interest rate is 5.5%. Based on the previous graph, the quantity of loanable funds supplied is (___________) (___________) than the quantity of loans demanded, resulting in a (____________) of loanable funds. This would encourage lenders to (___________) the interest rates they charge, thereby (___________) the quantity of loanable funds supplied and (___________) the quantity of loanable funds demanded, moving the market toward the equilibrium interest rate of (___________) %.

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. INTEREST RATE (Percent) 12 11 10 9 10 10 m 2 1 0 600, 6 Supply Demand 0 100 200 300 400 500 600 700 800 900 1000 1100 1200 LOANABLE FUNDS (Billions of dollars) ? is the source of the supply of loanable funds. As the interest rate rises, the quantity of loanable funds supplied Suppose the interest rate is 5.5%. Based on the previous graph, the quantity of loanable funds supplied is demanded, resulting in a of loanable funds. This would encourage lenders to than the quantity of loans the interest rates they charge, thereby

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. INTEREST RATE (Percent) 12 11 10 9 10 10 m 2 1 0 600, 6 Supply Demand 0 100 200 300 400 500 600 700 800 900 1000 1100 1200 LOANABLE FUNDS (Billions of dollars) ? is the source of the supply of loanable funds. As the interest rate rises, the quantity of loanable funds supplied Suppose the interest rate is 5.5%. Based on the previous graph, the quantity of loanable funds supplied is demanded, resulting in a of loanable funds. This would encourage lenders to than the quantity of loans the interest rates they charge, thereby

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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] In the loanable funds market model, assuming everything else is constant, which curve (supply of funds or demand for funds) is affected if there is an increase in national saving? How will equilibrium real interest rate and equilibrium quantity of loans change?
1. I would like for you to identify and explain how a government budget surplus impacts the loanable fund market by explaining which curve(s) moves and which direction. 2. Identify of being a closed economy or an open economy affects the market differently.
The graph below represents the market for loanable funds for an economy. Use the graph to answer the following questions. real interest rate 6% 51000 Loanable fund $ Assume there currently is a surplus in the market for loanable funds. The current real interest rate is I Select) the equilibrium real interest rate. As the market moves to the equilibrium real interest rate we expect I Select ] Demand for loanable funds comes from the activities of ISelect) 13
K Consider the graph to answer the following questions: a. The shift from S, to S₂ represents in the supply of loanable funds. b. With the shift in supply, the equilibrium quantity of loanable funds c. With the change in the equilibrium quantity of loanable funds, the quantity of saving and the quantity of investment ▼ A CI Real Interest Rate Market for Loanable Funds L₂ L1 Loanable Funds ($ per year) S₁ Q
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)
The graphs below depict the loanable funds market and the relationship between real interest rates and the level of net capital outflow (NCO) calculated in terms of the Mexican peso. REAL INTEREST RATE (Percent) 8 8 10 3 1 The Market for Loanable Funds in Mexico + 0 1 2 3 4 Supply Demand 5 6 LOANABLE FUNDS (Billions of pesos) Initial state After capital flight 7 8 (?) REAL INTEREST RATE (Percent) Complete the first row of the table to reflect the state of the markets in Mexico. Real Interest Rate Net Capital Outflow (NCO) (Percent) (Billions of pesos) Mexican Net Capital Outflow 8 7 6 10 5 4 3 2 NÇO + # -3 -2 -1 0 1 2 3 4 5 NET CAPITAL OUTFLOW (Billions of pesos) 6 (?) Suppose now that a sudden bout of political turmoil in Mexico causes world financial markets to become uneasy. Because investors now see Mexico as unstable, they decide to pull a portion of their assets out of Mexico and put them into more stable economies. This unexpected shock to the demand for assets in Mexico is…
During the financial crisis it was proposed that firms be provided with a tax credit for investment projects. Such a tax credit would shift: a. the demand for loanable funds left and shift the supply of dollars in the market for foreign-currency exchange right. b. both the demand for loanable funds and the supply of dollars in the market for foreign-currency exchange right. c. both the demand for loanable funds and the supply of dollars in the market for foreign-currency exchange left. d. the demand for loanable funds right and shift the supply of dollars in the market for foreign-currency exchange left.
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
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If expectations about future income change, there is no change in saving until income actually changes. a decrease in saving if people expect income to increase in the future. an increase in saving if people expect income to increase in the future. a decrease saving if people expect income to decrease in the future. a change in the quantity of loanable funds supplied and a movement along the supply of loanable funds curve.