are my answers correct? This question addresses the impact of saving on an economy by examining what happens if tax laws change to induce saving and how changes in taxlaws can discourage saving.The following graph shows the market for loanable funds.Show the impact of a change in the tax law that successfully encourages saving by shifting either the demand curve (D), the supply curve (S), orboth.INTEREST RATESD021DS(?) INTEREST RATELOANABLE FUNDSSDDoDSA tax law change that successfully encourages saving will decrease interest rates, which leads to moreinvestment and economic growth.To better understand how changes in tax laws can affect saving, suppose that Gabrielle, a rising third-year in college, plans to save $550 from hersummer job in order to buy textbooks for the upcoming fall semester. Gabrielle's parents are so impressed with her plans that they offer to pay her anadditional 30% interest per month on the money she saves, which means that Gabrielle is now earning a large rate of return on her saving. By theend of the summer, it turns out that Gabrielle saved only $450 (before the interest paid by her parents) from her job. This means that thesubstitutionincomeeffect must be bigger than theeffect for Gabrielle in this case.

In the market for loanable funds, interest rates are determined by supply and demand. The demand for…

This question addresses the impact of saving on an economy by examining what happens if tax laws change to induce saving and how changes in tax laws can discourage saving. The following graph shows the market for loanable funds. Show the impact of a change in the tax law that successfully encourages saving by shifting either the demand curve (D), the supply curve (S), or both. INTEREST RATE S D₁ D₂ 中。中。 (?

This question addresses the impact of saving on an economy by examining what happens if tax laws change to induce saving and how changes in tax laws can discourage saving. The following graph shows the market for loanable funds. Show the impact of a change in the tax law that successfully encourages saving by shifting either the demand curve (D), the supply curve (S), or both. INTEREST RATE S D₁ D₂ 中。中。 (?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Related questions

Q: Determine whether each of the statements given is true or false.

A: Hello. Since your question has multiple sub-parts, we will solve the first three sub-parts for you.…

Q: Explain behavioral economic belief

A: Behavioral economics is one of the branches of economics. Generally behavioral economics is deals…

Q: We learned that we can use choice between a gamble over someone's best and worst outcomes and…

A: On a scale of (0 to 1 ) for utility let us consider the utility attained from best possible outcome…

Q: I don't understand equilibrium at all

A: Equilibrium is the point which is found where the demand curve and supply curve intersects each…

Q: Mika earns $379 per week which she spends entirely at the grocery store, purchasing either food or…

A: Mika's weekly income = $379 Additional food stamps = $50Total money available for food = $379 + $50…

Q: Which behaviours does expected-utility theory (EUT) have trouble explaining?

A: Utility, with regards to decision theory and economics, alludes to the emotional worth or…

Q: In 2018, Spotify was available in many countries around the world. The same year, Spotify offered an…

A: Spotify offers a new deal for students only. In this deal they will get Spotify Premium, Hulu…

Q: Identify and explain three differences between neoclassical economics economics and behavioral…

A: Economics is considered the study of the production, distribution, and consumption of goods and…

Q: Solve all questions compulsory .....you will not solve all questions then I will give you down…

A: Detailed explanation:To determine the combination of beer (B) and hotdogs (D) that maximizes Sam's…

Q: Imagine you are in charge of traffic safety for a city. A high visibility crosswalk with flashing…

A: GivenInstallation of traffic lights will increase safety and reduce the fatality risk by…

Q: Where is answer for 4, and the explanation

A: When an entity's production or consuming actions have an effect on a third party who is not tied to…

Q: What is the matching concept?

A: The matching concept is an accounting practice whereby companies acknowledge revenue and related…

Q: How do we measure utility? Are interpersonal (i.e. between people) comparisons valid? Why or why…

A: The measure that depicts the benefit or satisfaction that is being received by individual due to the…

Q: Which of the following facts could not be explained by path-dependence? (choose one) A) Sue lives…

A: Path dependence is when the decisions presented to people are dependent on previous decisions or…

Q: Peer pressure is an important influence on the behavior of youngsters. For instance, many preteens…

A: The peer pressure is defined influence that has been created on an individual or a group of people…

Q: Complete the behavioral economics crossword puzzle. Submit it via this Blackboard assignment in PDF…

A: Behavioral economics studies the effects of psychological, emotional, cognitive, social, and…

Q: Alex, who was convinced that "Football is coming home", was very excited for the World Cup last…

A: INTRODUCTIONIn the midst of World Cup excitement, Alex, a passionate football enthusiast, eagerly…

Q: What is the meaning of the denial of entanglement?

A: In an economy, when people interact with each other, there are various costs and benefits associated…

Q: First-year Commerce students were asked to play an Ultimatum game where a choice had to be made over…

A: The ultimatum game involves dividing the constant sum of money between the proposer and responder in…

Q: YVETTE: I'm leaving you, Sean. Get over it. SEAN: Are you saying that being single will make you…

Q: Suppose you observe a person's answer to two decision problems. Problem 1: You are offered $40…

A: Rational decision making is a multi-step process for making choices between alternatives. The…

Q: When a person demands something (in economics) they must be , and to buy

A: Demand is one the most crucial factors of any kind of microeconomic analysis, which forms a base for…

Q: If the price of restaurant meals is overall higher in big cities then you might expect young people…

A: Yes, people do show their preferences where they choose to live.

Q: F.A. Hayek states that it is imperative for individuals to not only know the changes in prices, but…

A: Hayek's article contends against the foundation of a Central Pricing Board (pushed by Lange) by…

Q: The quality of the school district can affect house prices in that district. If the statement is…

A: The given statement is true. The quality of schools play an important role in house prices of a…

Q: Assume it has been determined that those that identify themselves as liberal have a higher…

A: Neoclassical economics is a theoretical framework that emphasizes the importance of supply and…

Question

100%

are my answers correct?

This question addresses the impact of saving on an economy by examining what happens if tax laws change to induce saving and how changes in tax
laws can discourage saving.
The following graph shows the market for loanable funds.
Show the impact of a change in the tax law that successfully encourages saving by shifting either the demand curve (D), the supply curve (S), or
both.
INTEREST RATE
S
D
02
1
D
S
(?)

INTEREST RATE
LOANABLE FUNDS
S
D
Do
D
S
A tax law change that successfully encourages saving will decrease interest rates, which leads to more
investment and economic growth.
To better understand how changes in tax laws can affect saving, suppose that Gabrielle, a rising third-year in college, plans to save $550 from her
summer job in order to buy textbooks for the upcoming fall semester. Gabrielle's parents are so impressed with her plans that they offer to pay her an
additional 30% interest per month on the money she saves, which means that Gabrielle is now earning a large rate of return on her saving. By the
end of the summer, it turns out that Gabrielle saved only $450 (before the interest paid by her parents) from her job. This means that the
substitution
income
effect must be bigger than the
effect for Gabrielle in this case.

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1: Market for loanable funds

Step 2: Part a

Step 3: Part b

Solution

Trending now

This is a popular solution!

Step by step

Solved in 4 steps with 1 images

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.

Similar questions

In 2019 the Dutch Parliament decided they were going to arbitrarily close 50% of their livestock farms. Soon after this, the Canadian Government was rumored to be on the verge of implementing an extremely large tax on Farm fertilizer used (upwards of 35-40% depending on where you looked). Assume they do go ahead with this rumored idea, what happens next, what is the fallout in the Economy and how will it impact you? Is this a good idea?
Give only typing answer with explanation and conclusion
Which of the following about emotional influence on decision making is true? People generally make rational decisions that maximize desirable outcomes in the absence of emotions Only emotions that are relevant to the decision at hand have any influence on that decision People tend to overestimate their predicted negative emotions resulting from a decision's outcomes People are equally angry about unfair offers in the ultimatum game from computers and from other human players
Explain why Von Hayek believes the Dependence Effect is not a bad thing.
like to be perceived. This underlying psychological force is what often spurs a person to fill this perceived gap (i.e., between where I am and where I want to be) through a purchase. The underlying force driving the individual to fill the gap is also referred to as the individual's:
Alex, who was convinced that "Football is coming home", was very excited for the World Cup last year. Unfortunately, he realized that his favourite Paul Gascoigne jersey from Euro 1996 was getting old, so he wanted to buy a new one before England's first game the following week. He could either buy a 2014 James Milner shirt from retailer A, which would make him totally happy (utility=1), or a 2006 David Beckham shirt from retailer B, which gives him a utility of 0.8. However, the shirts are not available today. There is a 50% chance that retailer A will have the shirt on the week-end, and 70% chance that retailer B will have theirs on the week-end. Due to time and work constraints, Alex can only visit one of these retailers before the tournament starts, otherwise he will have to keep his old 1996 shirt, which gives him a utility of 0.5. He can also ask his friend Nathan to check both places in the morning. But being a Welsh supporter, Nathan will not do it for free and wants some money…