The table shows the demand for loanable funds schedule and the supply of loanable funds schedule when the government budget is balanced. If the government budget deficit is $1.0 trillion, what are the real interest rate, the quantity of investment, and the quantity of private saving? Is there any crowding out in this situation? ETTE If the government budget deficit is $1.0 trillion, the real interest rate is percent a year If the government budget deficit is $1.0 trillion, the quantity of investment is $ trillion, and the quantity of private saving is $ trillion. Is there any crowding out in this situation? OA. Yes. The deficit increases the real interest rate, which decreases investment. Real interest rate (percent per year) 4567891 SIDE 10 4 Loanable funds Loanable funds demanded supplied (trillions of 2012 dollars per year) 8.5 8.0 7.5 7.0 6.5 05 6.0 5.5 5.5 6.0 6.5 7.0 679co co 7.5 05 8.0 8.5

The table shows the demand for loanable funds schedule and the supply of loanable funds schedule when the government budget is balanced. If the government budget deficit is $1.0 trillion, what are the real interest rate, the quantity of investment, and the quantity of private saving? Is there any crowding out in this situation? ETTE If the government budget deficit is $1.0 trillion, the real interest rate is percent a year If the government budget deficit is $1.0 trillion, the quantity of investment is $ trillion, and the quantity of private saving is $ trillion. Is there any crowding out in this situation? OA. Yes. The deficit increases the real interest rate, which decreases investment. Real interest rate (percent per year) 4567891 SIDE 10 4 Loanable funds Loanable funds demanded supplied (trillions of 2012 dollars per year) 8.5 8.0 7.5 7.0 6.5 05 6.0 5.5 5.5 6.0 6.5 7.0 679co co 7.5 05 8.0 8.5

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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What happens if there is an increase in the budget deficit? O O Raise the real Interest rate and decline the quantity of loanable funds demanded for Investment Lower the real Interest rate and decrease the quantity of loanable funds demanded for Investment. Lower the real Interest rate and increase the quantity of loanable funds demanded for Investment. Raise the real Interest rate and increase the quantity of loanable funds demanded for Investment. Reset Answer
Suppose the government's present value of current and projected future outlays is 75 percent of GDP and its present value of current and projected future revenues is 50 percent of GDP. What gap does this describe, and what is the size of the gap? This information describes the _______. A. fiscal gap, which is 25 percent of GDP B. generational gap, which is 25 percent of GDP C. fiscal gap, which is 125 percent of GDP D. fiscal gap, which is – 25 percent of GDP
pls also do the graph
Consider the following budget scenario in an economy for the year. Budget Estimates Tax Revenue (net to Centre) 215650 Recoveries of Loans 20900 Non-tax revenue 84350 Borrowings and other Liabilities 179100 Total Receipts 500000 Expenditure on Revenue Account 345000 Of which Interest payments 20000 Total expenditure On Capital Account 135000 Total Expenditure 500000 Calculate : 1. Revenue Deficit 2. Fiscal Deficit 3. Primary deficit b. Explain in brief the impact of the following: The government of India decides to finance the widening fiscal deficit by raising more debt from the private institutions/individuals . What is this impact known as ? Explain.
14) What could explain what is happening in the graph to the right? a. The government has given investors an investment tax credit, increasing investors appetite for savings. b. The government has removed the tax protected status of IRA accounts, increasing savings. c. The government balances the interest rate Το r1 Eo E1 So $1 budget reducing its debt, and the "crowding out" effect disappears. business desire to obtain funds. 90 91 quantity of loanable funds d. A new technology makes industry much more productive, therefore increasing e. There are many things that could explain what the graph shows us, but we don't have enough information to decide on any of a. thru d. above.
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8) government budget surplus from reduced government spending will ________ thelevel of investment in the economy and ________ the level of public saving in theeconomy.A) increase; decreaseB) increase; increase C) decrease; increaseD) decrease; decrease
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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.
1. Suppose GDP equals $7 trillion, consumption equals $1.5 trillion, the government spends $4 trillion and has a budget deficit of $1 Trillion Find public saving, taxes, private saving, national saving, and investment
Hi I want to ask what will happen to the market of loanable funds and the natural level of output in long run when the government runs a budget surplus? what will the graph of the loanable funds market look like?
5. Which of the following can be a reason for gov't deficit: Saving is very large O Investment is very small Net export is very large negative All of the above