Assume that policy makers have proposed a decrease in retirement ages for the citizens of your...

Assume that policy makers have proposed a decrease in retirement ages for the citizens of your country. Consider the effects of this proposed new policy.

a. Show how the change would affect supply and demand in the market for loanable funds.

b. How would this change affect the equilibrium interest rate and investment?

c. In the long run, how would this affect real GDP?

Expert Solution

Rahul Sunny answered 1 year ago

Assume that policymakers have proposed a decrease in retirement ages for the citizens of your country....

Assume that policymakers have proposed a decrease in retirement ages for the citizens of your country. Consider the effects of this proposed new policy. Show how the change would affect supply and demand in the market for loanable funds. How would this change affect the equilibrium interest rate and investment? In the long run, how would this affect real GDP?

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