3) Imagine the effects of a decline in the value of financial assets, such as stocks, on consumption and the economy. Which of the following would not offset these effects? decreasing taxes increasing the money supply increasing government spending undertaking no policy action

Economic investment refers to ________.   Question 4 options:   A)  postponing purchases of goods and services.   B)  selling a financial asset for a gain.   C)  buying a financial asset for a gain.   D)  making new additions to a firm's stock of capital.

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.) INTEREST RATE (Percent) Supply Demand LOANABLE FUNDS (Billions of dollars) Demand Supply (?) 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 a decrease in the maximum contribution, from $5,000 to $3,000 per year.

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