the demand for credit or loanable funds describes how much money consumers and business in an economy wish to borrow. Illustrates the four demands for loanable funds.
Q: 2. A retirement fund earns 6% interest, compounded quarterly. If $1,000,000 is desired to be in the…
A: Present value is the value of investment in today's dollar Future value is the value of investment…
Q: Consider Table 1. How do things change with a price floor of $8?
A: A price floor is the government-imposed minimum price set for a product. A price floor is binding…
Q: Chipotle operates in monopolistic competition. When Chipotle first opened it was one of the only…
A: Monopolistic competition refers to the competition where the many firms are there in the market and…
Q: 100 Price Level 90 80 70 60 50 40 30 20 10 0 0 1 2 Long-run Aggregate Supply Aggregate demand 3 4 6…
A: Aggregate demand refers to the total demand for goods and services in an economy at any given time.…
Q: Developing countries are associated with which of the following characteristics: a). Improved…
A: A developing country is one which does not have highly developed industrial sector and does not have…
Q: As you have seen, public budgeting is inherently political. Indeed, it is driven by an acutely…
A: The government's choices and actions regarding the collecting of taxes and the distribution of…
Q: vo firms, Sludge Oil and Northwest Lumber, have access to five production processes, each one of…
A: Process (Sm A(4 tons/day) B(3 tons/day) c(2 tons/day) d(1 tons/day) e(0 tons/day) cost to sludge…
Q: In the graph below we model the long-term rental market (i.e. contract of 6 months or more),…
A: Demand Schedule: Demand schedule for a good is a combination of different price and optimal quantity…
Q: Explain how to calculate and plot a point the MR curve in monopoly. (MR=0 cannot be used). The link…
A: Monopoly refers to that marker scenario in which there is single producer for any good . A monopoly…
Q: Inflation rates in the US have recently been at their highest level in decades. Imagine your local…
A: Contractary fiscal policy refers to a government's deliberate reduction of spending and/or increase…
Q: 5. A steam boiler is purchased on the basis of guaranteed performance. A test indicates that the…
A: Present value is the value of investment in today's dollar. Future value is the value of investment…
Q: If one assumes the tax cut is $245 billion, how much are taxes cut (in dollars) for families in the…
A: A tax cut is a reduction in the tax rate that individuals or businesses have to pay to the…
Q: Analyze below Cash Flow and compute for the unknown value. 1 $5 2 3 $5 $5 4 5 $10 $10 N 6 $20 7 $25…
A: Cash flow shows the organization's liquidity also its cash and cash equivalents. A company's…
Q: (a) If a saving account earns interest at 12% per year but is compounded quarterly, what is the…
A: Consumers wishing to increase their savings might use compound interest to their advantage. Making…
Q: 2. You are responsible for ensuring the beneficiary has safe and appropriate housing for the…
A: The area of the economy that is involved in building, selling, renting out, and maintaining…
Q: The elasticity of demand for a firm’s product is -5 and its advertising elasticity of demand is…
A: Profit maximization is the process by which a firm chooses the output level or pricing strategy that…
Q: Suppose inflation is still high by the end of 2023 and the Fed chair announces his/her policy.…
A: To correct the economy from the effect of inflation, if the fiscal policy is used then the…
Q: Sword Properties in Knoxville, TN built a shopping center at a cost $50M in year 2010. The company…
A: Depreciation can be termed as a fall in the cost of assets that are fixed due to constant use of it.…
Q: investigate real and current issues within the field of macroeconomics relating about Gross Domestic…
A: Macroeconomics is a field of economics that deals with the behavior of the economy as a whole,…
Q: According to the _______________, the holdings of a country' treasure primarily in the form of gold…
A: Ricardo Theory: The Ricardo Theory, also known as the theory of comparative advantage, contends that…
Q: Determine aggregate expenditures (AE) in this economy when real GDP (Y) is equal to $1,500 billion,…
A: The total amount spent by businesses and the government on consumption, investments, and other…
Q: Give the formulas for and plat average fixed cest, AFC, marginal cast, MC, average variable cost,…
A: Cost curves are graphical representations of the relationship between the quantity of goods or…
Q: (Real options) Hurricane Katrina brought unprecedented destruction to New Orleans and the…
A: Environmental damage is the depletion of the environment due to the deterioration of resources such…
Q: Calculate how much tax revenue the government will raise
A: Equilibrium in the market occurs at the intersection of the demand and supply curves. Imposition of…
Q: Leonora has the utility function u(x, y) = 4x - y^2 a.Draw the indifference curve for a utility…
A: U(x, y) = 4x - y2 MRS = MUxMUy = 42y Hence the slope of the indifference curve is 2/y
Q: 1. What is the exchange rate between the U.S. and Germany? Has there been appreciation or…
A: The exchange rate is the valuation of a currency expressed in terms of another currency. It depicts…
Q: monetary policy rule and monetary policy discretio
A: In order to accomplish its policy goals, such as stable prices, high employment, and sustained…
Q: ings account at First Bank. The reserve requirement facing First Bank Is 8%. structions: Enter your…
A: Legally, commercial banks may be compelled to hold a portion of deposits received as reserves,…
Q: Y d Oc.c-d b d. Investment is not represented e. a-b a SY Using the above graph, steady-state…
A: At steady state, rate of change in capital per worker is zero, that capital per worker remains…
Q: The less salient is a tax to consumers, the greater the incidence on: A) consumers B) producers C)…
A: Tax is a compulsory payment made by consumer/producer to the government without having any direct…
Q: The marginal net benefit (MNB) curve is given by the: A Difference between the market demand and the…
A: The marginal net benefit is the difference between marginal benefit and marginal cost. i.e.,…
Q: we consider an agent Ann who consumes goods and y and has a utility U(x, y) = x²y. In these…
A: Expenditure minimization is a concept pertaining to microeconomics that involves finding the least…
Q: Suppose that the euro is trading at $1.90 per euro in the foreign exchange market. Next, suppose…
A: Answer: Introduction: Exchange rate: it refers to the price of one currency in terms of another…
Q: B- In the previously selected combination of goods ( item A), draw-up the budget line (oranges on…
A: Consumer theory is the study of how people allocate funds depending on their personal preferences…
Q: How many cryptocurrencies have lasted more than a few years? nearly zero percent of the current…
A: The currency which is bought and sold digitally is the cryptocurrencies. It is in the form of…
Q: Garret bought a leather football that cost $22. He then bought 10 more footballs for his friends.…
A: Total Cost : TC (F) = a + b*F a : intercept term b : slope term
Q: When hiring a new employee, a business has to pay certain expenses on this employee including wages…
A: Cost is an economic concept that refers to the resources, both monetary and non-monetary, that are…
Q: occurs when a company exports to a foreign market at a price that is either lower than the domestic…
A: International trade refers to the exchange of goods and services across national borders.…
Q: Suppose the Federal Reserve set the reserve requirement at 20%. Assume that banks lend all reserves…
A: Reserve requirement = 20% =0.20 Transaction…
Q: Q3. When the economy is at full capacity: A. The economy is at less than full potential employment,…
A: Full capacity output refers to the maximum amount of goods or services that a company or a…
Q: 2. The impact of a contractionary monetary policy (a) On the money markets (b) On the AD-AS…
A: Contractionary monetary policy refers to the policy changes that results in decrease in money supply
Q: Periodic Inventory Using FIFO, LIFO, and Weighted Average Cost Methods The units of an item…
A: The methods used to value a company's inventory include specific identification, first-in, first-out…
Q: The table shows the approximate increase in sales that an additional $100 spent on advertising, at…
A: Given information: x R 25 4 50 59 75 94 100 107 125 104 150 78 175 33
Q: Use the following table to answer the next five questions. Market for Corn Year Price Quantity…
A: Demand curve is the downward sloping curve. Supply curve is the upward sloping curve. Equilibrium…
Q: Suppose that the parents of a young child decide to make annual deposits into a savings account,…
A: Let, Annual deposit be A Deposit begins from the 5th Birthday to the 15th birthday. Withdrawal…
Q: Mr. Smith invested $2,500 in a savings account that earns 3% interest compounded annually. He made…
A: Present value is the value of investment in today's dollar. Future value is the value of investment…
Q: There are two different demand curves at your movie theaters. During the weekends, the inverse…
A: ***Since both the optimum quantities, for weekdays and weekends have been found out to be negative,…
Q: “Free-trade zones such as the EU and NAFTA lead a double life: They can promote free trade among…
A: Trade blocks, also known as regional trading blocs, are groups of nations that have agreed to…
Q: Which is likely if more concern to policy makers: a cyclical or a structural deficit?
A: A cyclical deficit refers to a temporary imbalance in a government's budget caused by fluctuations…
Q: Equal end of year payments of $263.80 each are being made on a $1,000 loan at 15% per year…
A: Given: Yearly payments (PMT) = $263.80 Loan amount (PV) = $1000 Number of payments = ? Interest rate…
4) a) the demand for credit or loanable funds describes how much money consumers and business in an economy wish to borrow. Illustrates the four demands for loanable funds.
Step by step
Solved in 3 steps
- 2. According to the textbook, which of the following statements is (are) correct? (x) The price of loanable funds is the interest rate and the interest rate is determined by the forces of supply and demand in the loanable funds market. (y) The supply of loanable funds slopes upward because an increase in the interest rate provides an incentive for people to save more. (z) The demand for loanable funds slopes downward because a decrease in the interest rate provides an incentive for people to borrow more. A. (x), (y) and (z) B. (x) and (y) only C. (x) and (z) only D. (y) and (z) only E. (x) only 4. Suppose a surplus of loanable funds exists at the present interest rate in the loanable funds market. Given the presence of this disequilibrium, A. the supply of loanable funds will shift to the right and the demand will shift to the left. B. the supply of loanable funds will shift to the left and the demand will shift to the right. C. both the supply of loanable funds and the demand will…1. Suppose the government borrows $20 million more next year than this year. a. How does the elasticity of the supply of loanable funds affect the size of thesechanges? b. How does the elasticity of the demand of loanable funds affect the size of thesechanges?Use Figure: The Market for Loanable Funds with Government Borrowing. After an increase in government borrowing, the equilibrium interest rate will rise from 6% to Interest rate (%) 12 10 8 5 4 2 O %, and the amount of private savings will Supply of loanable funds Demand for loanable funds 10 20 30 40 50 60 70 80 90 100 Quantity of loanable funds (billions of dollars)
- 27) What is the most likely impact of an increase in the government budget deficit on the market for loanable funds? a) Overall demand for loanable funds decreases. b) Overall supply of loanable funds increases. c) Real interest rates fall. d) Private investment spending decreases.5. The market for loanable funds and government policy The following graph shows the market for loanable funds. For each of the given scenarios, adjust the appropriate curve on the graph to help you complete the questions that follow. Treat each scenario separately by resetting the graph to its original state before examining the effect of each individual scenario. (Note: You will not be graded on any changes you make to the graph.) Customize and control Google Chrome Supply Demand Supply Demand LOANABLE FUNDS (Billions of dollars) Scenario 1: Individual Retirement Accounts (IRAS) allow people to shelter some of their income from taxation. Suppose the maximum annual contribution to such accounts is $5,000 per person. Now suppose there is an increase in the maximum contribution, from $5,000 to $8,000 per year. INTEREST RATE (Percent)What is the effect of a fall in the real interest rate on the demand for loanable funds? A fall in the real interest rate _______. A. increases the quantity of loanable funds demanded down along the demand curve B. decreases the quantity of loanable funds demanded up along the demand curve C. decreases the demand for loanable funds and shifts the demand curve leftward D. increases the demand for loanable funds and shifts the demand curve rightward
- 17. What makes up the supply curve in the loanable funds market? Why does this curve have a positive relationship with the real interest rate?#18. What would happen in the market for loanable funds if the government were to increase the tax on interest income? a The supply of loanable funds would shift right. b The demand for loanable funds would shift right. c The supply of loanable funds would shift left. d The demand for loanable funds would shift left.Figure 26-3. The figure shows two demand-for-loanable-funds curves and two supply-of-loanable-funds curves. S2 D2 D1 Refer to Figure 26-3. A shift of the supply curve from S1 to S2 is called a decrease in the quantity of loanable funds supplied. an increase in the supply of loanable funds. an increase in the quantity of loanable funds supplied. a decrease in the supply of loanable funds. B.
- 12. Which of the following is most likely to cause an increase in demand for loanable funds? (A) Banks fail across the nation, and are unable to return their depositors’ money. (B) The Financial Post releases a widely-read article, claiming that consumer and business confidence have declined. (C) The government provides a large tax credit for those who save money in banks. (D) The government reduces taxes on businesses, making investment more profitable.Chairman Latrobe, the Supreme Leader of Rolling Rock decided to increase the personal tax rate to fund the defense force. 8) How may this affect the loanable funds market? Explain by describing the change in the demand for, or the supply of, loanable funds. 9) Because of the change decreed by President Thug and your answer to question 8, what is likely to happen to the interest rate and the quantity of funds in the loanable funds market? 10) How will each of these Rolling Rockers feel about President Thug’s decision? (A) Investor Confidence (B) The President of Rolling Rock National BankScenario 3: Unemployment decreases throughout the country causing a dramatic increase in income for millions of Americans. Causing Americans to save more. 1. What is the likely effect of this increase in income on the supply of loanable funds? 2. What effect will this change have on the interest rate?