The more elastic the supply of loanable funds, theThe more elastic the demand for loanable funds, theis the change in national saving as a result of the increase in government borrowing.This belief would cause people to saveThis wouldthe change in national saving as a result of the increase in government borrowing.Suppose households believe that greater government borrowing today implies higher taxes to pay off the government debt in the future.today, which wouldprivate saving andthe effect of the reduction in public saving on the market for loanable funds.the supply of loanable funds. 7. Saving/Investment again---Suppose the government borrows $20 billion more next year than this year.The following graph shows the market for loanable funds before the additional borrowing for next year.Use the orange line (square point) to graph the new supply of loanable funds as a result of this government policy to borrow $20 billion more nextyear than this year.Interest Rate (Percent)10 Demand97X38boch21910010 20 3040 50 6070 80Loanable Funds (Billions of dollars)As a result of this policy, the equilibrium interest rateSupplyThe more elastic the supply of loanable funds, the90100New Supply?Which of the following statements accurately describe the effect of the increase in government borrowing? Check all that apply.National saving decreases by more than $20 billion.Private saving decreases by less than $20 billion.Investment decreases by less than $20 billion.Public saving decreases by exactly $20 billion.is the change in national saving as a result of the increase in government borrowing.

Budget deficit refers to a situation where a government spends more money than it collects in…

uppose the government borrows $20 billion more next year than this year. The following graph shows the market for loanable funds before the additional borrowing for next year. Ise the orange line (square point) to graph the new supply of loanable funds as a result of this government policy to borrow $20 billion more next -ear than this year. Interest Rate (Percent) 10 9 8 X 0 10 20 30 40 50 60 70 80 90 Loanable Funds (Billions of dollars) 3 Demand 2 Supply As a result of this policy, the equilibrium interest rate 100 0- National saving decreases by more than $20 billion. Private saving decreases by less than $20 billion. New Supply Which of the following statements accurately describe the effect of the increase in government borrowing? Check all that apply.

uppose the government borrows $20 billion more next year than this year. The following graph shows the market for loanable funds before the additional borrowing for next year. Ise the orange line (square point) to graph the new supply of loanable funds as a result of this government policy to borrow $20 billion more next -ear than this year. Interest Rate (Percent) 10 9 8 X 0 10 20 30 40 50 60 70 80 90 Loanable Funds (Billions of dollars) 3 Demand 2 Supply As a result of this policy, the equilibrium interest rate 100 0- National saving decreases by more than $20 billion. Private saving decreases by less than $20 billion. New Supply Which of the following statements accurately describe the effect of the increase in government borrowing? Check all that apply.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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d. A reduction in the cost of acquiring new physical capital creates many new profitable opportunities for firms. The Loanable Funds Market Interest rate This will: Quantity of dollars Interest rate This will: I Oraise the equilibrium interest rate and decrease the quantity of funds saved and invested. raise the equilibrium interest rate and increase the quantity of funds saved and invested. lower the equilibrium interest rate and decrease the quantity of funds saved and invested. lower the equilibrium interest rate and increase the quantity of funds saved and invested. e. The government decides to increase government purchases (G), which increases the size of the budget deficit. 0 The Loanable Funds Market Quantity of dollars S I O S Ø Oraise the equilibrium interest rate and increase the quantity of funds saved and invested. O raise the equilibrium interest rate and decrease the quantity of funds saved and invested. Olower the equilibrium interest rate and decrease the quantity of…
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PLEASE ANSWER ALL QUESTIONS NOT JUST SOME PLEASE WRITE THE EXACT NUMBERS FOR THE GRAPH. PLEASE READ CAREFULLY, THIS MAY BE A SIMILAR QUESTION, BUT ALL QUESTIONS ARE DIFFERENT
The crowding-out effect is the tendency for a government budget deficit to raise the and investment. O A. price level; increase O B. real interest rate; decrease O C. quantity of output; increase O D. real wage rate; decrease Click to select your answer. 888 :二。 F7 F6
The budget balance is $ enter your response here trillion. >>> Answer to 1 decimal place. If your answer is negative, include a minus sign. Do not include a plus sign.
Which group is most likely to demand funds from the financial (loanable funds) market? O financial institutions who lend funds to people. O the government when they run a budget surplus. O firms who want to borrow to pay for new capital. O people who have extra income they want to save. « Previous Next ASUS 16 5 6 7 R
5. Fiscal policy, the money market, and aggregate demand Suppose there is some hypothetical economy in which households spend $0.50 of each additional dollar they earn and save the $0.50 they over. The following graph plots the economy's initial aggregate demand curve (AD1). Suppose now that the government increases its purchases by $2.5 billion. Use the green line (triangle symbol) on the following graph to show the aggregate demand curve (AD₂) after the multiplier effect takes pla Hint: Be sure the new aggregate demand curve (AD2) is parallel to AD₁. You can see the slope of AD₁ by selecting it on the following gra (?) PRICE LEVEL 116 114 112 110 108 106 104 102 100 100 12 AD₁ 10 102 104 106 108 110 112 OUTPUT (Billions of dollars) 114 116 Money Supply Į þ The following graph plots equilibrium in the money market at an interest rate of 6% and a quantity of money equal to $15 billion. AD2 Show the impact of the increase in government purchases on the interest rate by shifting one or…
2. Considering the recent pandemic situation, Consumers fear a recession, they start reducing consumption. How can the government counteract (what policy government can consider)? What are the shortcomings of such a policy (fiscal)? Explain one of them. Use a graph to illustrate your arguments.
6. Graphical treatment of taxes and fiscal policy The main difference between variable taxes and fixed taxes is that unlike fixed taxes, variable taxes do not vary with GDP The following graph shows the consumption schedule for an economy with a given level of taxes. Suppose the government implements a tax increase through a fixed tax. Use two green points (triangle symbol) to connect the two black points (plus symbols) representing the consumption schedule after the change in taxes. Hint: The new consumption schedule must pass through one point on the left and one point on the right. Hint: The new consumption schedule must pass through one point on the left and one point on the right. 50 Consumption with Tax Increase through a Fixed Tax Consumption with Tax Increase through a Variable Tax + 20 40 60 80 100 REAL GDP (Billions of dollars) The blue line on the next graph represents the original total expenditure line for this economy before the change in tax structure. Use the new…
The Canadian federal budget moved from a surplus of 9.6billioninthe2007-2008 fiscalyeartoade ficitof5.8 billion the next year, and a large deficit of S55.6 billion in 2009-2010. a. Suppose real GDP was at potential in each of the first two years. What can you conclude about the cause of the change in the budget deficit? Show this change in a diagram of the budget deficit function. b. Suppose from 2008-2009 to 2009-2010, two things happened: real GDP fell and the government implemented an expansionary fiscal policy (both of which were true). Show these two separate events in a diagram of the budget deficit function.
The enormous budget deficits of 2009 through 2011 meant that the federal government was borrowing upwards of $1.5 trillion per year. If that borrowing had limited the ability of the private sector to get financial capital for its purposes, economists would call this crowding out. There was O significant evidence this was a problem because interest rates were very high. O little evidence this was a problem because interest rates were very low. O significant evidence this was a problem because interest rates were very low. O little evidence this was a problem because interest rates were very high.
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