The table shows the demand for loanable funds schedule and the supply of loanable funds schedule when the government budget is balanced. Real Loanable funds Loanable funds demanded supplied If the govemment budget surplus is $1.0 trillion, what are the real interest rate, the quantity of investment, and the quantity of private saving? Interest rate (percent per year) (illions of 2009 dollars per year) 8.0 6.0 7.5 7.0 6.5 6.5 7.0 15 If the govermment budget surplus is $1.0 trillion, the real interest rate is percent a year. 7.5 If the government budget surplus is S1.0 trillion, the quantity of investment is $ tilion, and the quantity of private saving is $ trillion. 6.0 8.0 5.5 8.5 10 5.0 90

The table shows the demand for loanable funds schedule and the supply of loanable funds schedule when the government budget is balanced. Real Loanable funds Loanable funds demanded supplied If the govemment budget surplus is $1.0 trillion, what are the real interest rate, the quantity of investment, and the quantity of private saving? Interest rate (percent per year) (illions of 2009 dollars per year) 8.0 6.0 7.5 7.0 6.5 6.5 7.0 15 If the govermment budget surplus is $1.0 trillion, the real interest rate is percent a year. 7.5 If the government budget surplus is S1.0 trillion, the quantity of investment is $ tilion, and the quantity of private saving is $ trillion. 6.0 8.0 5.5 8.5 10 5.0 90

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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please answer part 3
Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.
Q: Draw a graph depicting the market for loanable funds and analyze the impact of open market operations when the interest rate is at or near the zero lower bound. a. Illustrate the supply and dem and for loanable funds, labeling the supply curve (S), the demand curve (D), and the initial equilibrium interest rate and quantity of loanable funds. b. Show the effect of open market operations on the supply of loanable funds, and analyze its impact on the price of loanable funds.c. Introduce a situation in which the market for loanable funds faces the zero lower bound (it may be easiest to draw a new graph for this for the purpose of clarity). d. Explain how open market operations typically influence the supply of loanable funds and interest rates in normal circumstances. e. Discuss why these operations become less effective when the interest rate is at or near the zero lower bound.
c. Congress repeals an investment tax credit and uses the revenue to reduce other taxes. 10 S 8 7 6 5 4 3 2 D 1 100 200 300 400 500 600 700 800 900 1,000 Loanable funds Interest rate
Refer to the figure below to answer the following questions. Real interest rate (percent per year) CON 6 5 4 3 2 1 0 H H Select one: DLF₂ DLFO 0.5 1.0 1.5 2.0 Loanable funds (trillions of 2002 dollars) DLF₁ Refer to Figure 23.2.2. In Figure 23.2.2, a decrease the real interest rate will result in a movement from point E to A. point F. B. point G. C. point H. D. point. O E. either point G or point F. Figure 23.2.2
41. Suppose that government institutes an investment tax credit and such policy generates an increase in the government budget deficit. This would: a. shift the saving curve (i.e. supply of loanable funds) to the left. b. cause the real interest rate to fall.
4. Supply and demand for loanable funds 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) 10 9 1 0 0 Supply 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 Suppose the interest rate is 4.5%. Based on the previous graph, quantity of loanable funds supplied is demanded, resulting in a of loanable funds. This would encourage lenders to the quantity of loanable funds supplied and the equilibrium interest rate of % than the quantity of loans the interest rates they charge, thereby the quantity of loanable funds demanded, moving the market toward
4.5
Suppose a closed economy had public saving of -$1 trillion and private saving of $3 trillion. What are national saving and investment for this country? B $2 trillion, $2 trillion $2 trillion, $3 trillion C) $3 trillion, $3 trillion $4 trillion, $2 trillion
8 Demand, Supply 7 10 4 REAL INTEREST RATE (Percent) 3 2 - 10 20 30 40 50 60 70 80 QUANTITY OF LOANABLE FUNDS (Billions of dollars) Refer to Figure 33-1. If the real interest rate is 3 percent, the quantity of loanable funds demanded is $50 billion, and the quantity supplied is $30 billion. $20 billion, and the quantity supplied is $60 billion. $50 billion, and the quantity supplied is $60 billion. $30 billion, and the quantity supplied is $50 billion.
Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.
Which of the following is not a characteristic of a capital expenditure, for the purposes of government budgeting? a. recurring nature b. large price tag c. long life d. none of the above