If the government imposed a federal interest rate ceiling of 20% on all loans, who would gain and who would lose?

Q: Which of the following is considered to be loanable funds from financial institutions? CEA

A: The loanable funds concept is a theory of market interest rates in the field of economics. With this…

Q: Lowering the taxes on income can help in expanding the activities in the financial market.  True or…

A: Tax in the compulsory payment made by the individual or institution to the government without…

Q: Historically, usury laws that put below-equilibrium ceilings on interest rates have been used by…

A: A price ceiling is a type of price control that creates a barrier to the maximum price that can be…

Q: People should buy bonds when they think that interest rates are as high as they will go.

A: A bond is a financial instrument that allows an issuer to raise capital by borrowing money from…

Q: If government spending were increased, what would occur to interest rates

A: Government spending refers to the money spent by the government on things like health care,…

Q: What is the role of Democratic party politicians in trying to see how federal money makes its way to…

A: Financial planning means liberals favor a more moderate cost structure to provide more sorts of help…

Q: Some economists claim World War II ended the Great Depression of the 1930s. The war effort was…

A: The Great Depression was considered to be a severe worldwide economic depression that occurred…

Q: Describe how interest could be  good or bad, depending on the situation, and explain why interest…

A: If properly managed, a LOW INTEREST RATE can be beneficial. Low interest rates reduce demand for the…

Q: According to Milton Friedman, when the public holds more cash balances than it desires at any level…

A: Thus, Friedman offers quantity theory as a theory of money demand, with money demand supposed to be…

Q: If the Federal Reserve wants to set an interest rate that best promotes economic growth and new…

A: Answer - Need to find - factors should they consider Given in the question- If the Federal Reserve…

Q: What are the financial markets? What are the parties of the capital market?Explain it.

A: For the smooth operation of a capitalistic system, entrepreneurs and businesses rely on finance that…

Q: Do you think that the Fed should have bailed out large financial institutions during the credit…

A: The global financial crisis of 2008 was the largest crisis the world has weathered since the great…

Q: Which situation leads to the distinction between nominal and effective interest?

A: If the compounding is more frequent than once per year, then the nominal and effective interest rate…

Q: What do economists mean when they refer to Social Security as a pay-as-you-go plan? What is the…

A: - Social security is the base of economic security for many US retirees, disabled, and their…

Q: Would it be advantageous to borrow money if you expected prices to rise?  Would you want a…

A: Inflation is change in the overall price level of the economy. Generally, interest rates for loans,…

Q: Providing tax shelters through investment is one of the main functions of the financial system. *…

A: Tax shelters are necessary, despite the fact that they are sometimes seen negatively. Individuals…

Q: Predict how each of the following economic changes will affect the equilibrium price and quantity in…

A: Answering only the top three scenarios, as requested 1. When the number of people at the most common…

Q: Suppose the government starts running budget deficits without raising taxes or printing money. What…

A: 1. When the government start running budget deficit without raising the taxes, it will make them to…

Q: Why do you think the real interest rate was low during the recession in the mid-1970s and during the…

A: The GD {great depression} is described as the situation of the downturn of the economy which has…

Q: Market interest rates are established by the banks or any financial institutions. True or false?

A: Answer -  Market Interest rate - It is the interest rate given on the deposits or other investments…

Q: Distinguish between Market and Inflation-Free Interest Rates?

A: The Market interest Rate, also called the nominal interest rate (i) is the rate which is not…

Q: What is a budget deficit? How does it affect interest rates, investments and economic growth?

A: Budget deficits happen when spending is greater than revenue and signify the financial strength of a…

Q: Does the existence of credit market imperfections imply that there is a useful role for government…

A: Credit market imperfections means the financial market with low quality of information about the…

Q: Explain the concept of “The Lender of Last Resort”. Why is this needed, or why does it run counter…

A: The central bank is the apex monetary authority in the economy. The Federal Reserve is the central…

Q: When government bonds are held by foreigners, the interest income from the bonds goes to foreigners…

A: The national debt is the amount of debt that the government owes to the public as well as to other…

Q: Which is a reason for why private banks tend not to use the discount window?

A: The federal rate is the rate at which commercial banks borrow from each other whereas a discount…

Q: A Government issues a bond that pays 1000$ in 1 year. If the price of the bond is 920$, what is the…

A: Here, it is given that the government is paying an amount of $1000 for a bond, whose price is $920.

Q: The discount rate will never be equal to interest rate. True or False?

A: Discount rate is defined as the rate of interest which is charged to commercial banks and other…

Q: What will happen in the bond market if the government imposes a limit on the amount of daily…

A: If the government imposes a limit on daily transactions, then the ones who buy and sell in the…

Q: Name any two quantitative tool to control credit creation in an economy

A: The measures which manipulates the overall volume of the credit flow in an economy are term to be as…

Q: Should governments pay off their debts and not be allowed to borrow any more except under special…

A: money borrowed by the government generally to provide public services: The government intends to use…

Q: How can financial institutions overcome the inevitable mobility of students after graduation?

A: A financial institution is an organization that deals in several forms of monetary transactions,…

Q: Who can give a supportable market value opinion on a federal loan?

A: Financial Management Office (OCC), Federal Reserve System Board (FRB) Board of Trustees, Federal…

Q: Fiscal policy can affect the rental cost of capital. true or false?

A: Fiscal policy is the use of government spending and taxation by the government to influence the…

Q: If a government gains from unexpected inflation when it borrows, why would it choose to offer…

A: Government of a country generally chooses to offer indexed bonds when there are unexpected gains…

Q: How is the Social Security system currently influencing the size of the budget deficit? If it is not…

A: The budget deficit creates the problem in the economy. When there is budget deficit, it will leads…

Q: Mention a type of fiscal policy or monetary policy that is currently being implemented. Then discuss…

A: The fluctuation in the economic activity is tracked by the business cycle. In an economy, the fall…

Q: Which of the following is not a common result of Foreign owning large amounts of Home’s debt?   A.…

A: When a foreign country owes a large amount of Home's debt then it is like an outflow of capital from…

Q: Is it possible to assume there is crowding out as well with a formula? If there was crowding out of…

A:

Q: Explain how government gains from unexpected inflation when it borrows? If this is true, why would…

A: The unexpected inflation benefited the borrowers as the borrowers repay with the dollar that worth…