Answered: 2. Economy becomes more productive,…

2. Economy becomes more productive, when borrowing increases in a country( in Oman ) . Please explain with suitable examples.

Brief Principles of Macroeconomics (MindTap Course List)

8th Edition

ISBN:9781337091985

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter18: Six Debates Over Macroeconomic Policy

Section: Chapter Questions

Problem 8PA

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2. Economy becomes more productive, when borrowing increases in a country( in Oman ) . Please explain with suitable examples.

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1. Assume a pandemic hits a nation hard. As a result, firms are less confident about the economy. The most likely result would be a. a higher demand for loanable funds. b. a higher supply of loanable funds. c. an increase in equilibrium interest rates. d. a lower demand for loanable funds. e. higher productivity of capital.
5. In the loanable funds model, the country’s stock of “investment” comes from: Production firms renting equipment High real interest rates Rental firms purchasing new capital to rent out to production firms Foreign firms
1. If the following policies were implemented, how would it affect the market for loanable funds, interest rates, investment and economic growth. Explain by using diagrams.a) A change in tax code that might increase private saving. b) Increase in government spending and also budget deficits.
In the late 1990s, the U.S. government moved from a budget deficit to a budget surplus and the trade deficit in the U.S. economy grew substantially. Using the national saving and investment identity, what can you say about the direction in which saving on/or investment must have changed in this economy?
Draw a graph of the supply and demand of loanable funds. Then, show how the interest rate will be affected when the following scenarios occur: a. The government implements a program that reduces investment tax credits. b. The government budget deficit is reduced by 30%. (Hint: Does the government still need to borrow?) c. More foreigners are saving their money in U.S. banks.
1)Mcq 1.the economy as whole saving must be equal to a.expenditure b.budget c.public saving d.investement 2.________ economy is one that does not interact with other economies a.stagnant growth b.small c.closed d.open 3.________ is an institution that sales shares to the public and uses the proceeds to buy a selection a.mutual fund b.stock c.bank d.central bank 4.can economy increase its real gdp per capita by Putting more of the population to work ? a.yes b.no c.depends on size of the economy d.depends on size of the number of population 5.________ is the economist's term for knowledge and skills that workers acquire through education, training, and experience. a.skilled labor b.work force c.labor d.human capital 6.________economy interact with other economies around the world a.closed b.open c.large d.growing 7.if the real value of household assets falls the aggregate demand a.decreases b.increases c.remains constant d.no one of the above 8.if the economy in recession we…
Other things the same, people in the U.S. would want to save more if the real interest rate in the U.S. a. fell. The increased saving would increase the quantity of loanable funds demanded.b. fell. The increased saving would increase the quantity of loanable funds supplied.c. rose. The increased saving would increase the quantity of loanable funds demanded.d. rose. The increased saving would increase the quantity of loanable funds supplied.