The table shows an economy's demand for loanable funds and supply of loanable funds schedules when the government's budget is balanced. The quantity of loanable funds demanded increases by $1.0 trillion at each real interest rate. The quantity of loanable funds supplied increases by $2.0 trillion at each real interest rate. After these changes, what is the real interest rate, the quantity of loanable funds, investment, and private saving? >>> Answer to 1 decimal place. The real interest rate is 5 percent a year. The quantity of loanable funds is $ trillion, investment is $ trillion, and saving is $s trillion. Real interest rate (percent per year) 4 5 6 7 8 9 10 Loanable funds Loanable funds demanded supplied (trillions of 2012 dollars per year) 8.5 8.0 7.5 7.0 6.5 6.0 5.5 6.5 7.0 7.5 8.0 8.5 9.0 9.5

The table shows an economy's demand for loanable funds and supply of loanable funds schedules when the government's budget is balanced. The quantity of loanable funds demanded increases by $1.0 trillion at each real interest rate. The quantity of loanable funds supplied increases by $2.0 trillion at each real interest rate. After these changes, what is the real interest rate, the quantity of loanable funds, investment, and private saving? >>> Answer to 1 decimal place. The real interest rate is 5 percent a year. The quantity of loanable funds is $ trillion, investment is $ trillion, and saving is $s trillion. Real interest rate (percent per year) 4 5 6 7 8 9 10 Loanable funds Loanable funds demanded supplied (trillions of 2012 dollars per year) 8.5 8.0 7.5 7.0 6.5 6.0 5.5 6.5 7.0 7.5 8.0 8.5 9.0 9.5

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 market for loanable funds, the equilibrium interest rate is 3% and the equilirbium quantity of loanable funds is $500 billion.What's the likely result if bamks offer loans for an interest rate of 5%? a) the quantity of loans supplied by banks will be greater than the quantity of loans demanded from potential investors b) the government will issue more bonds to make up for the decreased number of loans c) there'll be an increase in borrowing d) the quantity of loanable funds demanded will increase
According to how we model the Loanable Funds market in Ch. 6 (considering household savings and taking (T – G) as government’s net ‘saving,’ which could be negative it there were a budget deficit), which of the following shifts the Supply of Loanable Funds curve to the left? (T = taxes; G = government spending.) Group of answer choices A) higher tax rates on business investment spending B) a change in tastes toward consuming less C) higher budget deficit D) change in tastes toward saving more E) lower budget deficit
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
Macmillan Learning U The graph depicts the market for loanable funds. Shift the appropriate curves to indicate what will happen to the market if there is an improvement in the technology firms use in production. As a result of this change, the real interest rate is now % Real interest rate 5.0 4.5 4.0 3.5 3.0 2.5 2.0 1.5 1.0 and the quantity of funds is $ billion. 0.5 Supply Demand 0.0 0 5 10 15 20 25 30 35 40 45 50 Loanable funds (in billions)
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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)
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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.