What is true about equilibrium in the market for loanable funds? A. Savings = gross domestic product (GDP) B. Investment = interest rate C. Interest rate = inflation D.
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What is true about equilibrium in the market for loanable funds?
Savings =
Investment = interest rate
Interest rate = inflation
Investment = savings
Market equilibrium of any things whether goods Markets or money market or Loanable funds market the demand always equal to supply at equilibrium point.
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- a high interest rate can also indicate that something positive is happening in the economy. Describe how positive factors can lead to an increased in the demand for loanable funds and then an increase in the interest rate.Investment — End of Chapter Problem Move the appropriate curve or curves in each graph to illustrate the effect of each of the four events on the market for loanable funds. If the event should not impact the market for loanable funds, then leave the graph unchanged.Select the true statement or statements regarding the loanable funds market. a.The purchase of stocks and bonds is considered savings. b.Savings from households are used by firms and governments to finance investment. c.Savings refers to savings accounts held in banks only. d.Foreign entities cannot save in the United States.
- Draw a graph of the supply and demand of loanable funds. Then, show how the interest rate will be affected when the following scenarios occur: a. The government implements a program that reduces investment tax credits. b. The government budget deficit is reduced by 30%. (Hint: Does the government still need to borrow?) c. More foreigners are saving their money in U.S. banks.Consider the market for loanable fund. Answer the question below. 2.a. The market equilibrium interest rate is 3%. But current interest rate is 4%. Then, is the supply of loanable fund larger, smaller or equal to the demand for loanable fund? 2.b. People’s preference for saving increased. Answer if the equilibrium interest rate and investment would increase, decrease, or would not change. Interest rate: Investment:#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.
- Qu Listen In which situation do you NOT contribute to the supply of loanable funds? a) You charge a vacation on a credit card. b) You pay off your mortgage. c) You open a new savings account. d) You make the final payment on your private student loan.In 1981, many interest rates in the United States were 15%, but the inflation rate was 10%. In 2015, many interest rates were less than 1%, and the inflation rate was 2%. a. What were the real interest rates in 1981 and 2015? b. all else equal, how does the drop in interest rates between 1981 and 2015 affect the quantity of loanable funds supplied?The source of the _ for loanable funds is saving. demand market supply interest rate The source of the _ for loanable funds is investment. supply interest rate demand market The _ represents the price of a loan. catch-up effect rate of inflation loan term interest rate
- What happens to the quantity of loanable funds supplied when the interest rate rises? Explain why this change happens?When the interest rate decreases, a)people would want to lend more, making the supply of loanable funds increase. b)people would want to lend less, making the supply of loanable funds decrease. c)people would want to lend more, making the quantity of loanable funds supplied increase. d)people would want to lend less, making the quantity of loanable funds supplied decrease.Interest Rate Quantity Demanded Quantity Supplied 12 100 520 10 200 480 8 300 440 6 400 400 4 500 360 2 600 320 The schedule shows various interest rates, the associated quantity demanded of loanable funds, and the quantity supplied of loanable funds in billions of dollars at those interest rates. What is the equilibrium interest rate? Group of answer choices 4 percent 6 percent 8 percent 10 percent