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As a result of this policy, the equilibrium interest rate    .   Which of the following statements accurately describe the effect of the increase in government borrowing? Check all that apply. National saving decreases by less than $20 billion.   Private saving increases by less than $20 billion.   Public saving decreases by exactly $20 billion.   Investment increases by less than $20 billion.     The more elastic the supply of loanable funds, the    is the change in national saving as a result of the increase in government borrowing.   The more elastic the demand for loanable funds, the    the change in national saving as a result of the increase in government borrowing.   Suppose households believe that greater government borrowing today implies higher taxes to pay off the government debt in the future. This belief would cause people to save    today, which would    private saving and    the supply of loanable funds. This would    the effect of the reduction in public saving on the market for loanable funds.

As a result of this policy, the equilibrium interest rate    .   Which of the following statements accurately describe the effect of the increase in government borrowing? Check all that apply. National saving decreases by less than $20 billion.   Private saving increases by less than $20 billion.   Public saving decreases by exactly $20 billion.   Investment increases by less than $20 billion.     The more elastic the supply of loanable funds, the    is the change in national saving as a result of the increase in government borrowing.   The more elastic the demand for loanable funds, the    the change in national saving as a result of the increase in government borrowing.   Suppose households believe that greater government borrowing today implies higher taxes to pay off the government debt in the future. This belief would cause people to save    today, which would    private saving and    the supply of loanable funds. This would    the effect of the reduction in public saving on the market for loanable funds.

Brief Principles of Macroeconomics (MindTap Course List)
Brief Principles of Macroeconomics (MindTap Course List)
8th Edition
ISBN:9781337091985
Author:N. Gregory Mankiw
Publisher:N. Gregory Mankiw
Chapter8: Savings,investment And The Financial System
Section: Chapter Questions
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As a result of this policy, the equilibrium interest rate    .
 
Which of the following statements accurately describe the effect of the increase in government borrowing? Check all that apply.
National saving decreases by less than $20 billion.
 
Private saving increases by less than $20 billion.
 
Public saving decreases by exactly $20 billion.
 
Investment increases by less than $20 billion.
 
 
The more elastic the supply of loanable funds, the    is the change in national saving as a result of the increase in government borrowing.
 
The more elastic the demand for loanable funds, the    the change in national saving as a result of the increase in government borrowing.
 
Suppose households believe that greater government borrowing today implies higher taxes to pay off the government debt in the future.
This belief would cause people to save    today, which would    private saving and    the supply of loanable funds. This would    the effect of the reduction in public saving on the market for loanable funds.
6. Problems and Applications Q8 Suppose the government borrows $20 billion more next year than this year. The following graph shows the market for loanable funds before the additional borrowing for next year. Use the orange line (square point) to graph the new supply of loanable funds as a result of this government policy to borrow $20 billion more next year than this year. 10 Demand Supply 9. New Supply 7 4 3 2 1 0 10 20 30 40 50 60 70 80 90 100 Loanable Funds (Billions of dollars) Interest Rate (Percent)
Transcribed Image Text:6. Problems and Applications Q8 Suppose the government borrows $20 billion more next year than this year. The following graph shows the market for loanable funds before the additional borrowing for next year. Use the orange line (square point) to graph the new supply of loanable funds as a result of this government policy to borrow $20 billion more next year than this year. 10 Demand Supply 9. New Supply 7 4 3 2 1 0 10 20 30 40 50 60 70 80 90 100 Loanable Funds (Billions of dollars) Interest Rate (Percent)
As a result of this policy, the equilibrium interest rate Which of the following statements accurately describe the effect of the increase in government borrowing? Check all that apply. National saving decreases by less than $20 billion. Private saving increases by less than $20 billion. Public saving decreases by exactly $20 billion. Investment increases by less than $20 billion. The more elastic the supply of loanable funds, the is the change in national saving as a result of the increase in government borrowing. The more elastic the demand for loanable funds, the the change in national saving as a result of the increase in government borrowing. Suppose households believe that greater government borrowing today implies higher taxes to pay off the government debt in the future. This belief would cause people to save today, which would private saving and the supply of loanable funds. This would the effect of the reduction in public saving on the market for loanable funds.
Transcribed Image Text:As a result of this policy, the equilibrium interest rate Which of the following statements accurately describe the effect of the increase in government borrowing? Check all that apply. National saving decreases by less than $20 billion. Private saving increases by less than $20 billion. Public saving decreases by exactly $20 billion. Investment increases by less than $20 billion. The more elastic the supply of loanable funds, the is the change in national saving as a result of the increase in government borrowing. The more elastic the demand for loanable funds, the the change in national saving as a result of the increase in government borrowing. Suppose households believe that greater government borrowing today implies higher taxes to pay off the government debt in the future. This belief would cause people to save today, which would private saving and the supply of loanable funds. This would the effect of the reduction in public saving on the market for loanable funds.
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