Within the IS-LM curve model, if the government cut taxes at the same time that there was an autonomous increase in investment demand then   a. income and the interest rate would rise. b. the interest rate would rise but the effect on income is uncertain. c. income would rise and the interest rate would fall. d. income would rise but the effect on the interest rate is uncertain.

Q: A rightward shift of the investment demand curve would be caused by a(an) a. increase in the…

A: Investment demand is constructed to depict the relationship between the interest rate and amount of…

Q: a. The interest rate falls as a result of Federal R policy. p. The U.S. Environmental Protection…

A: An investment is a resource or thing procured determined to produce income or appreciation.…

Q: a. Draw the circular flow of spending and income. Put a proper label on every box and flow. b.…

A: Circular flow of income is the flow of income from one sector to other sector.  When economy is…

Q: There is recently an increase in private saving in Canada. Assume this occured by a drop in…

A: A loanable funds market is where households, who save some proportion of their money, enter the…

Q: The sum of the marginal propensity to save and the marginal propensity to consume Select one: A.…

A: MPC stands for marginal propensity to consume. This measures the net change in the consumption…

Q: A temporary increase in government expenditure will a. Shift the saving curve to the right b.…

A: Government expenditure (G): - government expenditure is the spending made by the government on the…

Q: Marginal propensity to save is: A   total saving divided by total income. B   the change in…

A: Marginal propensity to saving (MPS) refers to the additional saving due to increase the level of…

Q: In the graph you've just made, how does a tax on interest income influence the real interest rate…

A: Equilibrium in the loanable funds market occurs at the intersection of demand and supply curves.

Q: Eleanor purchases stock in NanoSpeck, a biotech firm. Darnell purchases a new condominium in Denver.…

A: Savings means to save from money from the earning which is used in future purpose. Investment means…

Q: I and T are fixed (I=Io and T=to), so we know that if households attempt to save more, cet. par.,…

A: The national saving(S) and investment(I) identity provides an important way to understand the…

Q: Explain the difference between saving and investment as defined by macroeconomist. Which of the…

A: In macroeconomics, saving and funding are distinct concepts with unique implications.

Q: d. In order to finance the increase in government spending on national defense from part (b), the…

A: The exchange that takes place between lenders and borrowers, who each need money to support their…

Q: The Average Propensity to Save is:     A. the percentage of income that is saved   B. the…

A: When talking about average propensity based on income, it refers to the economic tool to find the…

Q: Click on the icon to read the news cip. Explain and draw a graph to illustrate how a fall in…

A: Aggregate demand:Aggregate Demand is when the total number of consumers have the desire to buy…

Q: Which of the following decreases in response to the interest-rate effect from an increase in the…

A: If price level increases, inorder to control it, interest rate increases so that money in…

Q: In a hypothetical economy, no investment projects are undertaken when the real interest rate is 18…

A: In a hypothetical economy, each project is worth $1 million. No investment projects are undertaken…

Q: not use ai please

A: DiagramsFor each scenario, the supply and demand for loanable funds can be represented by shifting…

Q: 10. The breakeven point represents the level at which aggregate expenditures equal gross domestic…

A:

Q: Assume the marginal propensity to save is 0.10. Firms become optimistic and increase investment…

A: Real GDP is the value of final goods and services produced in the economy within a given period of…

Q: will a reduction in the real interest rate increase investment spending, other things equal? Why is…

A: ‘Real interest rate(r)’ is referred to a rate that is adjusted to eliminate the inflation effect.…

Q: Please take your time to help me because so many answers are wrong. Help with b, c and d Consider an…

A: To determine economic health, numerous measures and formulas are used to find the output, GDP,…

Q: If current and future consumption are both normal goods, a decrease in the interest rate will…

A: The intertemporal choice model: The intertemporal choice model was developed by Irvin Fisher. Irvin…

Q: How does a decrease in interest rates typically affect consumer spending and investment? A. Consumer…

A: Interest rates are a vital piece of the economy, influencing different aspects of financial…

Q: Explain, why is reducing the interest rate not necessarily enough to stimulate investment spending?

A: The money used by firms and businesses to buy capital equipments and tools to increase production…