Question
In: Economics
For each of the following separate scenarios, determine how the supply/demand for loanable funds in the...
- For each of the following separate scenarios, determine how the supply/demand for loanable funds in the US shifts.
- The economy is growing and household income increases.
- Government delays the retirement age.
- Online shopping makes it easier for customers to consume.
- Companies are more pessimistic during recessions.
Solutions
Rahul Sunny answered 2 years agoRelated Solutions
For each of the following separate scenarios, determine how the supply/demand for loanable funds in the...
For each of the following separate scenarios, determine how the
supply/demand for loanable funds in the US shifts.
The economy is growing and household income increases.
Government delays the retirement age.
Online shopping makes it easier for customers to consume.
Companies are more pessimistic during recessions.
For each of the following separate scenarios, determine how the supply/demand for loanable funds in the...
For each of the following separate scenarios, determine how the
supply/demand for loanable funds in the US shifts.
The economy is growing and household income increases.
Government delays the retirement age.
Online shopping makes it easier for customers to consume.
Companies are more pessimistic during recessions.
1.For each of the following separate scenarios, determine how the supply/demand for loanable funds in the...
1.For each of the following separate scenarios, determine how
the supply/demand for loanable funds in the US shifts. (a)The
economy is growing and household income increases.
(b)Government delays the retirement age.
(c)Online shopping makes it easier for customers to consume.
(d)Companies are more pessimistic during recessions.
2.Suppose people now have higher time preferences.
(a)How would this affect the loanable funds market? Show your
answers in a graph.
(b)Would GDP increase or decrease?
Consider the US loanable funds market. For each of the following separate scenarios, draw a graph...
Consider the US loanable funds market. For each of the
following separate scenarios, draw a graph to show how the
equilibrium interest rate and equilibrium quantity of loanable
funds changes.
Banks impose more regulations and make it more difficult for
firms to borrow.
Productivity of machines decreases.
Households are less confident about the economy, they expect a
recession will come soon.
If households expect a recession will come soon, will this
increase the natural rate of unemployment? Explain.
A recession...
For each of the following events, -State if the demand for loanable funds or the supply...
For each of the following events,
-State if the demand for loanable funds or the supply of
loanable funds (or neither) will be affected
-Then state if the curve will increase or decrease
-Finally indicate the direction of the shift(left or right)
Events:
A. The government deficit increases.
B. People decide to save more
C. Net capital outflow increases at each interest rate.
D. Domestic investment increases at each interest rate.
If the demand for loanable funds shifts to the left and the supply of loanable funds...
If the demand for loanable funds shifts to the left and the
supply of loanable funds shifts to the right, then the real
interest rate rises.
Select one:
True
False
Question text
In the open economy macroeconomic model of the U.S. economy,
national savings is equal to the difference between domestic
investment and net capital outflow.
Select one:
True
False
Suppose residents of the United States desired to decrease their
purchases of foreign assets. Ceteris paribus, the real exchange
rate...
Does each of the following affect either the supply or the demand for loanable funds, and...
Does each of the following affect either the supply or the
demand for loanable funds, and if so, does the affected curve
increase (shift to the right) or decrease (shift to the left)?
What’s the effect on the equilibrium interest rate and equilibrium
quantity of loanable funds? (Please present your answer
graphically.)
(1) The Federal government reduces the tax of corporate
profit.
(2) Crowding out
For each of the following state whether the supply or demand for loanable funds is increasing...
For each of the following state whether the supply or demand for
loanable funds is increasing or decreasing.
a. Individuals cut back on their travel and entertainment
spending for fear of catching the coronavirus.
b. Businesses expect the recession to depress profits next
year
c. New technological advances make electric cars cost
competitive with internal combustion cars
d. Businesses delay their investment plans until after the
November 2020 election.
e. There is political unrest in a foreign country
f. State...
Using the loanable funds theory and the demand and supply of loanable funds, explain what will...
Using the loanable funds theory and the demand and supply of
loanable funds, explain what will happen to the real interest rate
in an economy if a recession occurs, such as occurred with the
Covid19 pandemic.
why is the supply of loanable funds upward sloping? why is the demand for loanable funds...
why
is the supply of loanable funds upward sloping? why is the demand
for loanable funds downward sloping? Explain the equilibrium
interest rate and graph the model.
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