Vertical axisHorizontal axisDLine 1a shift from line 1 to line 4movement from B to Aa shift from line 2 to line 3movement from A to Ba shift from line 3 to line 2Line 4Line 2Line 3Assuming the figure represents the market for loanable funds, which of the followingwould represent a cut in corporate tax rates, causing business owners and managersto become more optimistic?

Equilibrium in the loan market occurs at the intersection of demand and supply curves of loanable…

Vertical axis Horizontal axis D Line 1 Line 4 a shift from line 1 to line 4 movement from B to A a shift from line 2 to line 3 movement from A to B a shift from line 3 to line 2 Line 2 Line 3 Assuming the figure represents the market for loanable funds, which of the following would represent a cut in corporate tax rates, causing business owners and managers to become more optimistic?

Vertical axis Horizontal axis D Line 1 Line 4 a shift from line 1 to line 4 movement from B to A a shift from line 2 to line 3 movement from A to B a shift from line 3 to line 2 Line 2 Line 3 Assuming the figure represents the market for loanable funds, which of the following would represent a cut in corporate tax rates, causing business owners and managers to become more optimistic?

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter21: Financial Markets, Saving, And Investment

Section: Chapter Questions

Problem 9P

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Suppose the government runs fewer budget deficit and there is a decrease in the average household income. Then, O The new EQ quantity of loanable funds would be indeterminate, , but the new EQ interest rate would increase. O The new EQ quantity of loanable funds would decrease, but the new EQ interest rate would be indeterminate. O The new EQ quantity of loanable funds would be indeterminate, , but the new EQ interest rate would decrease. The new EQ quantity of loanable funds would be indeterminate, but the new EQ interest rate would increase. The new EQ quantity of loanable funds would increase, but the new EQ interest rate would be indeterminate.
The loanable funds model suggests that increased government spending, financed by borrowing, will cause business nvestment to and household saving to Select one: O a increase, increase Ob increase; decrease Oc decrease, increase Od decrease; decrease
Rail freight carloads and intermodal container traffic and changes are a telltale of supply chain activity and the economy at large. Slower traffic could indicate a cooling off while higher traffic portends increasing activity.. From Graph, what do you surmise?
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The Atlantic Investment Tax Credit is a 10% tax credit available to businesses that make specific investments in the Atlantic region and the Gaspe Peninsula. The graph shows the market for loanable funds. Show the impact of this tax credit by moving the proper curve appropriately in the graph. The new equilibrium interest rate is The quantity of loanable funds is $ ક billion Which statement accurately describes the impact of the Atlantic Investment Tax Credit? Interest rate (%) 10 9 8 7 6 5 st 3 2 1 0 0 5 10 15 20 25 30 35 Quantity of loanable funds (in billions) 40 Supply Demand 45 50
If the government instituted an investment tax credit, then which of the following would be higher in equilibrium? Use the loanable funds model to answer. O a. Neither the saving nor the interest rate O b. The saving but not the interest rate O c. The saving and the interest rate O d. The interest rate but not the saving
The permanent income hypothesis is consitent with cross-section and time-series data because a. higer-income households are savers, since their current income includes positive transistory conponents. O b. higer-income households are savers, since their current income includes negative transistory conponents. c. lower-income households are dissavers, since their current income includes positive transistory components. O d. lower-income households are savers, since their current income includes negative transistory conponents.
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Question 31 Figure 26-1 The figure depicts a demand-for-loanable-funds curve and two supply-of-loanable-funds curves. S₁ Demand Refer to Figure 26-1. Which of the following events would shift the supply curve from S₁ to S2? O a. In response to tax reform, firms are encouraged to invest more than they previously invested. O b. In response to tax reform, households are encouraged to save more than they previously saved. c. Government goes from running a balanced budget to running a budget deficit. O d. Any of the above events would shift the supply curve from S₁ to S2.
Refer to Figure 26-1. What is measured along the vertical axis of the graph? a. The tax rate b. The interest rate c. The quantity of investment d. The quantity of saving