Use diagrams to show Ricardian Equivalence and the Impact of a Budget Surplus on Credit Markets. (Two altogether separate diagrams.) Label and draw changes carefully. Explain in a sentence or two the thrust of each concept (i.e., what happens or changes).
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2. Use diagrams to show Ricardian Equivalence and the Impact of a Budget Surplus on Credit Markets. (Two altogether separate diagrams.) Label and draw changes carefully. Explain in a sentence or two the thrust of each concept (i.e., what happens or changes).
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- a). Under what condition do we say a financial market is efficient? Distinguish between weak and semi-strong form efficiency. b). Explain any five (5) ways a company can raise equity capital in the financial market. c). One of the ways in which the government can finance its fiscal deficit is to borrow funds through the domestic loanable fund market. Explain how this deficit financing strategy of the government can crowd out the domestic private sector and increase interest rate.16. Assume that the government sets a ceiling on the interest rate that banks charge on loans. If the ceiling is set below the market equilibrium interest rate, the result will be: Select one: a. a shortage of credit. b. greater profits for banks issuing credit. c. a surplus of credit d. a perfectly inelastic supply of credit in the market place.1a) The surplus and deficit economic agents engage in financial markets transactions to satisfy their needs in the most efficient manner. Explain the needs and motivation of those surplus and deficit economic agents. Discuss why they use the financial markets and how they have conflicting preferences in terms of liquidity, risk and amounts of money.
- Q) . __________ are an efficient and convenient way for governments and corporations to borrow large sums of money from investors for a long period of time. Credit cards, Stocks, Bonds, Bank loansAnswer the following questions using any tools at your disposal. More credit will be given for answers that use the graphical tools presented in class, along with a “story.” A. The federal government ran a budget surplus in the late 1990 and in the year 2000 but has since returned to running a budget deficit. 1. Explain why reducing the budget deficit can cause short-term pain in the form of lower employment, higher unemployment, and a recession.Fiscal policy refers to a) the spending and taxing policies used by the government to influence the economy. b) the behaviour of the nation's central bank, regarding the nation's money supply. c) the techniques used by a firm to reduce its tax liability. d) the government's ability to regulate a firm's behaviour in the financial markets.
- In a booming economy, is the federal government more likely to run surpluses or deficits? What are the various factors at play?Question Please select the correct term for each statement below. National savings, budget deficit, capital, inflow, budget, surplus, and budget balance a. the difference between the amount the government collects and how much it spend. b. when government savigns are combined with all of the privately-held savings from across the country. c. the result when the government spends more money than it takes in through taxes. d. the net amount of funds coming into a country. e. when the government spends less money than it takes in through taxes.Suppose the government borrows $20 billion more next year than this year. a. Use a supply-and-demand diagram to analyze this policy. Does the interest rate rise or fall? b. What happens to investments?To private savings?To public savings?To national savings? Compare the size of the changes to the $20 billion of extra government borrowing. c.How does the elasticity of supply of loanable funds affect the size of these changes? d. How does the elasticity of demand of loanable funds affect the size of these changes?
- and future updates? Download Don't show again nay be a victim of software counterfeiting. Avoid interruption and keep your files safe with genuine Office today. 2. What are the budget revenues for a government to finance government spending? Explain why money printing is not desirable instrument to finance budget deficit?Answer the following questions using any tools at your disposal. More credit will be given for answers that use the graphical tools presented in class, along with a “story.” A. The federal government ran a budget surplus in the late 1990 and in the year 2000, but has since returned to running a budget deficit. 2. Explain why expansionary monetary policy would help decrease the likelihood of a recession if it were adopted at the same time the budget deficit was being reduced.Text Problem 14-2 Question Help v Suppose that the Office of Management and Budget provides the accompanying estimates of federal budget receipts, federal budget spending, and GDP, all expressed in billions of dollars. Calculate the implied estimates of the federal budget deficit as a percentage of GDP for each year. (Enter each response as a percentage rounded to one decimal place. Do not include a plus or minus sign.) Federal Budget Receipts (2% growth) $2,329.8 Federal GDP Deficit as a % Budget Spending (5% growth) $2,682.6 Year (3% growth) $14,573.2 of GDP 2019 2020 2,376.4 2,816.7 15,010.4 % 2021 2,423.9 2,957.6 15.460.7 2022 2,472.4 3,105.4 15.924.5