ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN: 9780190931919
Author: NEWNAN
Publisher: Oxford University Press
Bartleby Related Questions Icon

Related questions

Question

The impact of international capital flows

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.

 

 

8. The impact of international capital flows
Suppose that the following graph depicts the market for funds in the US credit market. The blue line, labeled D, represents the demand for funds. The
supply curve labeled s₁ represents the supply curve of funds from American sources, with no foreign funds in the market. The supply curve labeled
$2 represents the supply curve of funds from both American and foreign sources.
Long-Term Interest Rate
10
9
D
Amount of Funds
$₁
$₂
(?
expand button
Transcribed Image Text:8. The impact of international capital flows Suppose that the following graph depicts the market for funds in the US credit market. The blue line, labeled D, represents the demand for funds. The supply curve labeled s₁ represents the supply curve of funds from American sources, with no foreign funds in the market. The supply curve labeled $2 represents the supply curve of funds from both American and foreign sources. Long-Term Interest Rate 10 9 D Amount of Funds $₁ $₂ (?
Without influence from foreign sources of funds, the long-term equilibrium interest rate is
term equilibrium interest rate is
%.
The following graph depicts the market for business investments in the United States. The green line represents the relationship between the long-
term interest rate and the amount of business investments.
Use the black point (plus symbol) to plot the point that represents the combination of business investment and long-term interest rate that comes
about when there is no influence from foreign funds. Then, use the grey point (star symbol) to plot the point that represents the combination of
business investment and long-term interest rate when the influence from foreign funds is accounted for.
(?)
Long-Term Interest Rate
10
9
8
5
3
2
1
0 #
0
50
100
150 200 250 300 350 400 450
US Business Investment (Billions)
500
%. With influence from foreign funds, the long-
+
Without foreign funds
With foreign funds
expand button
Transcribed Image Text:Without influence from foreign sources of funds, the long-term equilibrium interest rate is term equilibrium interest rate is %. The following graph depicts the market for business investments in the United States. The green line represents the relationship between the long- term interest rate and the amount of business investments. Use the black point (plus symbol) to plot the point that represents the combination of business investment and long-term interest rate that comes about when there is no influence from foreign funds. Then, use the grey point (star symbol) to plot the point that represents the combination of business investment and long-term interest rate when the influence from foreign funds is accounted for. (?) Long-Term Interest Rate 10 9 8 5 3 2 1 0 # 0 50 100 150 200 250 300 350 400 450 US Business Investment (Billions) 500 %. With influence from foreign funds, the long- + Without foreign funds With foreign funds
Expert Solution
Check Mark
Knowledge Booster
Background pattern image
Economics
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.
Similar questions
Recommended textbooks for you
Text book image
ENGR.ECONOMIC ANALYSIS
Economics
ISBN:9780190931919
Author:NEWNAN
Publisher:Oxford University Press
Text book image
Principles of Economics (12th Edition)
Economics
ISBN:9780134078779
Author:Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:PEARSON
Text book image
Engineering Economy (17th Edition)
Economics
ISBN:9780134870069
Author:William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:PEARSON
Text book image
Principles of Economics (MindTap Course List)
Economics
ISBN:9781305585126
Author:N. Gregory Mankiw
Publisher:Cengage Learning
Text book image
Managerial Economics: A Problem Solving Approach
Economics
ISBN:9781337106665
Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:Cengage Learning
Text book image
Managerial Economics & Business Strategy (Mcgraw-...
Economics
ISBN:9781259290619
Author:Michael Baye, Jeff Prince
Publisher:McGraw-Hill Education