E4 A rightward shift in the supply of loanable funds caused by a reduction in the government budget deficit or a reduction in the tax on interest income (capital gains tax) does which of the following?A. decrease in interest ratesOB. increase in investmentOC. Increases the short run growth rate in living standardOD. all of the aboveOE none of the aboveReset Selection

When talking about loanable funds market, it can be said that the supply of loanable funds is made…

A rightward shift in the supply of loanable funds caused by a reduction in the government budget deficit or a reduction in the tax on interest income (capital gains tax) does which of the following? OA decrease in interest rates OB. increase in investment OC increases the short run growth rate in living standard OD. all of the above OE none of the above Reset Selection

A rightward shift in the supply of loanable funds caused by a reduction in the government budget deficit or a reduction in the tax on interest income (capital gains tax) does which of the following? OA decrease in interest rates OB. increase in investment OC increases the short run growth rate in living standard OD. all of the above OE none of the above Reset Selection

Essentials of Economics (MindTap Course List)

8th Edition

ISBN:9781337091992

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter17: Production And Growth

Section: Chapter Questions

Problem 4CQQ

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1. Assume that the loanable funds market in country X is currently in equilibrim represented by thegraph of the loanable funds where interest rate is r1 and Quantity of loanable funds as Q1. Assume that, government of Country X, which had a balanced budged now increased their spendingwhile the taxes are constant.GDP = 1,000 million BDT G = 100 million BDT C = 850 million BDTX = 100 million BDT T = 50 million BDT M = 125 million BDTA) What is the level of investment spending and private savings? B) What are amounts of budget balance (deficit/surplus) and net capital inflow? [Hint: net capitalinflow equals the value of imports (M) minus the value of exports (X)] Assume that the government funds the increase in spending through increased borrowingC) What will be the impact of the policy action on the interest rate and quantity of loanable funds?Draw correctly labeled graph D) Given your answer, how will the private sector be affected? Is there any “crowding out”?Explain. (Take help of…
If the following policies were implemented, how would it affect the market for loanablefunds, 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.
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Please explain the role of government in economic growth and especially about government expenditure. I need-point wise detailed description of at-least 5 roles of government and 5 expenditure areas that can boost the economy.
In 1981, many interest rates in the United States were 15%, but the inflation rate was 10%. In 2015, many interest rates were less than 1%, and the inflation rate was 2%. a. What were the real interest rates in 1981 and 2015? b. all else equal, how does the drop in interest rates between 1981 and 2015 affect the quantity of loanable funds supplied?
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if Government Spending (G) is $200 million, Tax Revenue (T) is $260 millio Consumption is $300 million, and GDP P(Y) is 780 millionPrivate saving is