_______ raises the equilibrium real interest rate and decreases the equilibrium quantity of loanable funds.     A. A decrease in default risk   B. An increase in expected future income   C. An increase in disposable income   D. A decrease in wealth

During the financial crisis it was proposed that firms be provided with a tax credit for investment projects. Such a tax credit would shift:   a. the demand for loanable funds left and shift the supply of dollars in the market for foreign-currency exchange right.   b. both the demand for loanable funds and the supply of dollars in the market for foreign-currency exchange right.   c. both the demand for loanable funds and the supply of dollars in the market for foreign-currency exchange left.   d. the demand for loanable funds right and shift the supply of dollars in the market for foreign-currency exchange left.

41. Suppose that government institutes an investment tax credit and such policy generates an increase in the government budget deficit. This would: a. shift the saving curve (i.e. supply of loanable funds) to the left. b. cause the real interest rate to fall.

1) Using a graph representing the market for loanable funds, show and explain what happens to interest rates and investment if: a reduction in military spending moves the government’s budget from deficit into surplus. Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.

A rise in the federal funds rate a. raises the long-term real interest rate. b. does not change the long-term real interest rate. c. lowers the long-term real interest rate. d. may raise or lower the long-term real interest rate, depending on whether the demand for loanable funds curve has a negative or a positive slope.

8 Demand, Supply 7 10 4 REAL INTEREST RATE (Percent) 3 2 - 10 20 30 40 50 60 70 80 QUANTITY OF LOANABLE FUNDS (Billions of dollars) Refer to Figure 33-1. If the real interest rate is 3 percent, the quantity of loanable funds demanded is $50 billion, and the quantity supplied is $30 billion. $20 billion, and the quantity supplied is $60 billion. $50 billion, and the quantity supplied is $60 billion. $30 billion, and the quantity supplied is $50 billion.

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.