Macroeconomics
13th Edition
ISBN: 9780134735696
Author: PARKIN, Michael
Publisher: Pearson,
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Question
Chapter 30, Problem 15APA
(a)
To determine
Explain the effect of tax rate on capital income, if inflation rises.
(b)
To determine
Explain the effect of supply on loanable funds, if inflation rate increases.
(c)
To determine
Explain the effect of
(d)
To determine
Explain the effect of equilibrium investment, if inflation rate increases.
(e)
To determine
Explain the effect of equilibrium real interest rate, if inflation rate increases.
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Students have asked these similar questions
Suppose that the government changes the tax code to allow
additional amounts of money to be placed in 401(k)
retirement accounts, increasing the extent to which people
can delay their tax obligations. Show the effect by shifting the
appropriate curve in the market for loanable funds. What are
the new equilibrium real interest rate and the quantity of
loanable funds?
Real interest rate
28
Interest rate
5.0
4.5
4.0
3.5
3.0
25
2.0
*
1.5
1.0
0.5
0.0
0 20
Loanable funds $
Supply
Demand
40 60 80 100 120 140 160 180 200
Loanable funds (millions)
million.
Suppose that the government changes the tax code to allow additional amounts of money to be placed in 401(k) retirement
accounts, increasing the extent to which people can delay their tax obligations. Show the effect by shifting the appropriate curve
in the market for loanable funds.
Loanable funds
Demand
Interest rate
Supply
What would happen in the market for loanable funds if the government were to increase the tax on interest income?
A) Real interest rates would rise.
B) Real interest rates would be unaffected
C) Real interest rates would fall.
D) The effect on the real interest rate is uncertain.
Chapter 30 Solutions
Macroeconomics
Ch. 30.1 - Prob. 1RQCh. 30.1 - Prob. 2RQCh. 30.1 - Prob. 3RQCh. 30.1 - Prob. 4RQCh. 30.1 - Prob. 5RQCh. 30.2 - Prob. 1RQCh. 30.2 - Prob. 2RQCh. 30.2 - Prob. 3RQCh. 30.2 - Prob. 4RQCh. 30.2 - Prob. 5RQ
Ch. 30.3 - Prob. 1RQCh. 30.3 - Prob. 2RQCh. 30.3 - Prob. 3RQCh. 30.3 - Prob. 4RQCh. 30.3 - Prob. 5RQCh. 30.4 - Prob. 1RQCh. 30.4 - Prob. 2RQCh. 30.4 - Prob. 3RQCh. 30.4 - Prob. 4RQCh. 30.4 - Prob. 5RQCh. 30 - Prob. 1SPACh. 30 - Prob. 2SPACh. 30 - Prob. 3SPACh. 30 - Prob. 4SPACh. 30 - Prob. 5SPACh. 30 - Prob. 6SPACh. 30 - Prob. 7SPACh. 30 - Prob. 8SPACh. 30 - Prob. 9SPACh. 30 - Prob. 10SPACh. 30 - Prob. 11SPACh. 30 - Prob. 12APACh. 30 - Prob. 13APACh. 30 - Prob. 14APACh. 30 - Prob. 15APACh. 30 - Prob. 16APACh. 30 - Prob. 17APACh. 30 - Prob. 18APACh. 30 - Prob. 19APACh. 30 - Prob. 20APACh. 30 - Prob. 21APACh. 30 - Prob. 22APACh. 30 - Prob. 23APACh. 30 - Prob. 24APACh. 30 - Prob. 25APACh. 30 - Prob. 26APACh. 30 - Prob. 27APACh. 30 - Prob. 28APA
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