1) The government's budget deficit increases, and at the same time the trade deficit grows. This will lead to a(n) _____ in the demand and a(n) _____ in the supply of loanable funds in domestic markets. increase; increase decrease; increase decrease; decrease
Q: What can be worth more or less in international markets depending on how trustworthy the government…
A: An international market defines the global arena in which goods, services, currencies, and assets…
Q: This graph shows the short-run aggregate supply curve (SRAS) of a hypothetical economy where the…
A: The entire amount of products and services that all businesses in an economy are willing and able to…
Q: A small town has two bakeries, Acme and Fat Apple. Acme's marginal cost to make a loaf of bread is…
A: Acme's marginal cost to make a loaf of bread is $1 and Fat Apple's marginal cost is $2Acme's demand…
Q: 3. What is the future value in year 10 of the series described in Problem 2?
A: Present value is the value of investment in today's dollar. Future value is the value of investment…
Q: The elasticity of demand for apples is estimated to be -1.75. If the price of apples falls by 10%,…
A: Price elasticity of demand is a measure of the responsiveness or sensitivity of the quantity…
Q: Assume that New York City politicians respond by imposing a regulated price of $2.50 per mile.…
A: Consumer surplus is the difference between actual price and the price which consumer is willing to…
Q: The following are the parameters for the simple economy of Minnerva, which has no government…
A: Aggregate Demand: Aggregate demand in an economy is the sum of private consumption expenditure (C),…
Q: As a result of the North American Free Trade Agreement (NAFTA), trade restrictions between the…
A: A hypothesis in international trade called the Stolper-Samuelson theorem links changes in factor…
Q: Which of the following is the best example of an economic investment? Apple builds a new plant to…
A: Economic investment refers to the allocation of financial resources, capital, or assets, with the…
Q: 7. I The assigned New York Times and VOX articles summarize some of economists' feelings about the…
A: During the COVID-19 pandemic, many employees and companies transitioned to remote work to comply…
Q: Refer to the Figure 4-7. What would cause the movement from point B to point A on the graph? a. an…
A: This can be defined as the willingness of the purchaser to purchase goods and services at given…
Q: Suppose that Martha’s income is $40,000 per year. She can spend it on health care visits, which cost…
A: Utility maximization problem: With the given prices and the income, a consumer chooses his…
Q: Consider a buyer whose valuation for successive units of a good is as follows. q V(q) MV(q) 0$0 –…
A: Marginal valuation, in economics, implies the additional value or utility that an individual or firm…
Q: Q=AE, Q AQ 1 = AE =C+I+G + Xn, 1 - C = Ca + mpc Q mpc 1 m pc I= 100, G = 200, Ca = 100, Xn=-100, (C₁…
A: Aggregate demand is the sum of consumption, investment, government spending and net export. This…
Q: Question 3 (c). Market Demand Curve [Ch.4] Imagine Sue's demand curve for shoes is Q=8-2P and…
A: The market demand curve refers to the sum of all the individual demand curves of the market. Adding…
Q: Suppose that on Monday, a Big Mac cost $3.00 in the United States and 310 Japanese yen in Japan. On…
A: The exchange rate defines the relative value of one currency in terms of another, calculating the…
Q: Given a demand curve of P = 137 - 8Qd and supply of P = 43 + 1Qs, find the price elasticity of…
A: The price elasticity is calculated as the percentage change in quantity demanded divided by the…
Q: Suppose a car loan rate is 9.9 and the inflation rate is -0.7. What is the real rate of interest ont…
A: The real interest rate is the adjusted inflation rate which removes inflation.
Q: If the market is described by the given Demand curve, and Supply curve S3, what is total market…
A: Total surplus, also known as economic surplus or social surplus, refers to the overall welfare or…
Q: 16. Demand is said to be elastic if a. the price of the good responds substantially to changes in…
A: Elasticity of demand is the responsiveness of the change in quantity demand to the change in…
Q: Figure 21-15 On the graph, Q, represents the quantity of good x and Qy represents the quantity of…
A: The indifference curve depicts the combination of two goods that derive the same level of utility to…
Q: Blue Origin Engine Factory purchased a new vertical turning lathe in 2023 at a cost of $190,000.…
A: It is a system of depreciation commonly used for tax purposes in the United States. MACRS determines…
Q: Cashews (pounds) 150 Pakistan 240 Cotton (bolts) Cashews (pounds) 120 Neither country Indonesia…
A: Opportunity cost is the next best alternative.Opportunity cost shows the forgone units of one good…
Q: Sabrina prefers $22.00 now to $25.00 one year from now but prefers $25.00 one year from now to…
A: Time preference, which is the idea that people value money differently depending on when it is…
Q: In England, tea and scones are complements to the typical consumer. An increase in the supply of…
A: Complementary goods are materials that are bought together but are separate entities. For instance,…
Q: 4. Economic sanctions Indicate whether each outcome in the following table is or is not an objective…
A: Economic sanctions are defined as the barriers to investment and trade practices imposed by a…
Q: Question 9 When governments grant patents: C producers earn profits that are substantially higher…
A: Patents grant gives the producer monopoly in the market which gives the producer right to charge…
Q: Refer to the diagrams. The solid lines are production possibilities curves, the dashed lines are…
A: The PPF is also referred to as the production possibility curve (PPC). It is a key economic concept…
Q: Explain the role of advertising in monopolistic competition. Describe how advertising by all firms…
A: Industrial economics is the study and appraisal of business financial issues utilizing abstract…
Q: of the people described below, who would be counted as unemployed? Choose one or more: DA a…
A: A unemployed refers to a perosn who is actively looking for the work but are unable to get any job…
Q: 1 Consider the following production functions: 1. Y = AK 1/3L2/3 2. Y = A(K +L) 3. Y = (AL)1/4K1/4…
A: 1. Y=AK1/3L2/3a. To calculate whether the production function exhibits constant returns to scale…
Q: NATIONAL INCOME DATA (in current prices) 1992 III Personal consumption expenditures Gross private…
A: This can be described as domestic product that is the final combination of products and services in…
Q: Suppose you get utility from two goods, food and clothing, and have a certain amount income. Explain…
A: This can be defined as the concept that presents the graphical representation of the quantity of the…
Q: $50 $20 500 $9,000 Quota $12,000 1000 1200 1500 S D Refer to the figure above. Assume the government…
A: Deadweight loss defines the loss of economic efficiency that happens when the equilibrium quantity…
Q: We sell our Mexican combo for $5.95. Our average shop sells 600 Mexican combos each week. We…
A: When the price of a Mexican combo is $5.95, then the quantity demanded of Mexican combos is 600.…
Q: what is a compensating balance and how does it affect the interest rate on a line of credit?
A: Compensating balance refers to the balance maintained by borrower in a account with lender like a…
Q: What can be said about point G? It is inefficient It is unattainable It is impossible for this…
A: The production possibility frontier shows the different combinations of two goods that can be…
Q: A positive cross-elasticity of demand for two products indicates that they are: Multiple Choice O O…
A: Two goods are said to be complementary when they are used together. Two goods are said to be…
Q: Chris makes a deposit of $500 into his savings account at the beginning of each year for the next 20…
A: The future value refers to the value of an investment or cash flow at a specific point in the…
Q: Consider a simple exchange economy with two people: Bob and Jake. Bob and Jake both have ten hours…
A: PPF stands for the production possibility frontier.. It is a graphical representation of all…
Q: Huskamp et. al (2003) showed decreases in increases in copayments are associated with adherence.…
A: A copayment, often abbreviated as "copay," is a fixed amount of money that an individual is required…
Q: The graph below depicts a schedule of two individual marginal benefit curves (MB1 and MB2) as well…
A: Social marginal benefit refers to the total benefit of the society as a whole, excluding the social…
Q: ead the following premise carefully and answer the questions specifically and in detail: "Financial…
A: Adjusted for inflation, the real interest rate. this rate of return is the return on the savers’…
Q: For a perfectly competitive firm. The profit-maximizing quantity of output is
A: A perfectly competitive firm is a price taker. It takes the price determined by the market and sells…
Q: Assignment One Topic: Farm fertilizer In 2019 the Dutch Parliament decided they were going to…
A: Analyze the Dutch livestock farm closures in 2019:Explore the reasons behind the Dutch Parliament's…
Q: Calculate the four-firm concentration ratio (CR-4) given the sales data. Assume that the firms…
A: It is used to measure the market conditions based on the share of the companies in the industry.…
Q: Giocattolo is a profit-maximizing firm producing toy cars, which it can produce and sell in its home…
A: The best production strategy is a strategy that minimizes the overall average cost of production.
Q: Danny "Dimes" Donahue is a neighborhood's 9-year-old entrepreneur. His most recent venture is…
A: Price elasticity of demand measures the responsiveness in quantity demanded of a commodity to a…
Q: 2. The relationship between marginal and average costs Suppose Antonio is a professional basketball…
A: Average costs refer to the per unit cost.Marginal costs refer to the additional cost incurred in…
Q: You plan to make a lump-sum deposit of $5000 now into an investment account that pays 6% per year,…
A: Future value (FV) is a financial concept that represents the value of a sum of money at a specific…
1) The government's budget deficit increases, and at the same time the
increase; increase
decrease; increase
decrease; decrease
2) A temporary decrease in government purchases would cause:
a rightward shift in the saving curve and a leftward shift in the investment curve.
a rightward shift in the saving curve and a rightward shift in the investment curve.
no shift in the saving curve, but a leftward shift in the investment curve.
Trending now
This is a popular solution!
Step by step
Solved in 4 steps
- Private domestic saving provides the pool of funds available for Private domestic saving provides the pool of funds available for ... only financing government budget deficits putting under one's mattress Domestic investment and financing government budget deficits Consuming goods and servicesIn view of the large adverse impact of COVID-19 on the world economy, many governments have implemented expansionary fiscal policy. Together with a decrease in tax revenues, the governments have sufferedlarge deficits. How does a government deficit affect the interest rate, the quantity of loanable funds and economic growth? Explain your answers with a diagramBased on the Ricardian Equivalence, explain the impact of the debt-financed tax cut on public saving, private saving, and national saving.
- An increase in the budget deficit is the result of: A) Expansionary monetary policy; B) Contractionary monetary policy; C) Expansionary fiscal policy; D) Contractionary fiscal policy. Company tax is a: (a) Progressive, direct tax; (b) Progressive, indirect tax; (c) Proportional direct tax; (d) Regressive indirect tax. In the base year, a country produced 50 units of output at a price of R6,00 each for a nominal GDP of R300. This year it produces 60 units of output at a price of R8,00 each. What is the percentage change in real GDP since the base year? (a) 5%; (b) 10%; (c) 20%; (d) 15%.The current market rate of interest is 10 percent. At that rate of interest, businesses borrow $300 billion per year for investment and consumers borrow $50 billion per year to finance purchases. The government is currently borrowing $150 billion per year to cover its budget deficit.b. Assuming taxpayers do not anticipate an increase in the future market rate of interest due to the increase in budget deficit, show the impact of the increase in the budget deficit on the market for loanable funds.1a)If national income Y = 10,400, disposable income is Yd = 8,800 (assuming transfer payments are zero), consumption is C = 7,700, net exports is NX = 220, and the budget deficit is BD = 150, what is the level of private domestic investment, I ? 1,170 9,230 1,750 1,600 730 1b) The government's structural budget deficit is also called the cyclically-adjusted budget deficit general government budget deficit estimated budget deficit actual budget deficit cyclical budget deficit
- The current market rate of interest is 10 percent. At that rate of interest, businesses borrow $300 billion per year for investment and consumers borrow $50 billion per year to finance purchases. The government is currently borrowing $150 billion per year to cover its budget deficit. a. Derive the market demand for loanable funds, and show how investors and consumers will be affected if the budget deficit increases to $250 billion per year. b. Assuming taxpayers do not anticipate an increase in the future market rate of interest due to the increase in budget deficit, show the impact of the increase in the budget deficit on the market for loanable funds. c. How would your conclusion differ if taxpayers fully anticipate future tax increases to offset the increase in the budget deficit? d. Do you think the Ricardian Equivalence is realistic?China has seen a steep rise in total debt from 150% of GDP in 2008 to 250% today (the Economist, Nov. 15, 2018). Suppose the Chinese government addresses this with a package of spending cuts. (a1) What is the effect of China’s fiscal policy on the national saving rate? Use the Solow growth model to predict the effects on China’s steady-state income per capita. (a2) How does your answer change if the fiscal policy reduces government activities that have productivity effects? Please justify your answers along with drawing the graph of the Solow growth model.Assume the economy is open to capital inflows and outflows and therefore net capital inflow equals imports (IM) minus exports (X). Answer each of the following questions. a) X = $60 millionIM = $95 millionPrivate savings = $325 millionI = $300 million Calculate the budget balance. b) Private savings = $325 millionI = $400 millionBudget balance = $10 million Calculate IM − X.
- Government budget and national saving: 1. Suppose that GDP equals $10 trillion, consumption equals $6.5 trillion, and the government spends $2 trillion and has a budget deficit of $300 billion. Please find public saving, taxes, private saving, national saving, and investment.Other things equal, when the government runs a large budget deficit, it _____ national saving and thereby _____ capital formation and productivity growth. a) increase;increase b)decreases;decreases c)increase;decreases d;decreases;increasesThe following transactions took place in Ecoland in 2018: Trillions of 2014 dollars Government purchases 400 Taxes 360 Firms’ profits 300 Investment 400 Consumption expenditure 1000 Wages paid to labor 1400 Exports 300 Government transfer payments 150 Imports 350 (a). Calculate Ecoland’s real GDP in 2018, i.e., GDP measured in 2014 $. (b) How much do households save in Ecoland? Is it enough to finance domestic investment? (c) Does the government have a balanced budget? If not, what is the surplus or deficit? (d) If Ecoland’s nominal GDP in 2018 is $1900 trillion, how much inflation has Ecoland experienced since 2014?