The following graph shows the market for loanable funds in Aperto, a large open economy. The government of Aperto has just instituted a tax hike,decreasing the deficit.On the graph, shift either the demand curve or the supply curve to illustrate the change in fiscal policy.(?)Domestic SavingSupplyDemandSupplyDemand11020304050QUANTITY OF LOANABLE FUNDSThe decrease in deficit causes the interest rate in Aperto toAs an open economy,this change in interest rate causes the net capitalinflow to Aperto toThis change in net capital inflow causes Aperto's currency towhich in turn causes Aperto's netexports toThe change in net exports caused by the tax hikethe impact on aggregate demand of the restrictive fiscal policy.REAL INTEREST RATE

When the government influence the economic outcome by changing the tax or its spending or both then…

The following graph shows the market for loanable funds in Aperto, a large open economy. The government of Aperto has just instituted a tax hike, decreasing the deficit. On the graph, shift either the demand curve or the supply curve to illustrate the change in fiscal policy. (? Domestic Saving Supply Demand Supply Demand 10 20 30 40 50 QUANTITY OF LOANABLE FUNDS . As an open economy, this change in interest rate causes the net capital , which in turn causes Aperto's net The decrease in deficit causes the interest rate in Aperto to inflow to Aperto to exports to . This change in net capital inflow causes Aperto's currency to . The change in net exports caused by the tax hike the impact on aggregate demand of the restrictive fiscal policy. REAL INTEREST RATE

The following graph shows the market for loanable funds in Aperto, a large open economy. The government of Aperto has just instituted a tax hike, decreasing the deficit. On the graph, shift either the demand curve or the supply curve to illustrate the change in fiscal policy. (? Domestic Saving Supply Demand Supply Demand 10 20 30 40 50 QUANTITY OF LOANABLE FUNDS . As an open economy, this change in interest rate causes the net capital , which in turn causes Aperto's net The decrease in deficit causes the interest rate in Aperto to inflow to Aperto to exports to . This change in net capital inflow causes Aperto's currency to . The change in net exports caused by the tax hike the impact on aggregate demand of the restrictive fiscal policy. REAL INTEREST RATE

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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