)Consider the market for loanable funds. If economic conditions are expected to become better, then the demand for loanable funds will _____ and the supply of loanable funds will _____. decrease; not change decrease; decrease not change; increase increase; decrease

)Consider the market for loanable funds. If economic conditions are expected to become better, then the demand for loanable funds will _ and the supply of loanable funds will _. decrease; not change decrease; decrease not change; increase increase; decrease

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter21: Financial Markets, Saving, And Investment

Section: Chapter Questions

Problem 5P

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Q)Consider the market for loanable funds. If economic conditions are expected to become better, then the demand for loanable funds will _____ and the supply of loanable funds will _____.

decrease; not change

decrease; decrease

not change; increase

increase; decrease

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Usually, when the supply of loanable funds increases, then interest rates Select one: a. Might increase or decrease. b. Increase. c. Remain unchanged. d. Decrease.
What impact does the government have in the loanable funds market? Forces that change the demand for investment in turn impact the demand for loanable funds. These forces include the change of government policies
If the demand for loans is held constant, what is the immediate effect of an increase in the supply of loanable funds? A)Equilibrium interest rates decrease B)The equilibrium quantity of loanable funds decreases C)Total investment decreases
Investment — End of Chapter Problem Move the appropriate curve or curves in each graph to illustrate the effect of each of the four events on the market for loanable funds. If the event should not impact the market for loanable funds, then leave the graph unchanged.
QUESTION ONE Using the loanable funds theory, illustrate the effect of the following changes on the level of interest rates: Decrease in demand for loanable funds. Decrease in the supply of loanable funds.
a high interest rate can also indicate that something positive is happening in the economy. Describe how positive factors can lead to an increased in the demand for loanable funds and then an increase in the interest rate.
Where does the demand for loanable funds come from in a closed economy? How does a government adopting a policy of taxing investment from the private sector impact the demand for loanable funds? What happens to the equilibrium interest rate following this policy? Illustrate using the supply and demand in the market for loanable funds.
When does the supply of loanable funds increase? The supply of loanable funds increases when disposable income _______ or wealth _______. A. decreases; increases B. decreases; decreases C. increases; increases D. increases; decreases Thanks!
Using the market for loanable fund diagram, show graphically how it affects interest rate and investment in each of the following cases. a) G > T. b) A book titled ‘Live for Tomorrow’ convinces people to spend less. c) Tax on interest income rises. please answer step by step.Answer must be correct.Show all calculation. please Don,t copy from anywhere.
Textbook: Macroeconomics by P. Krugman & R. Wells (5th Edition) Using the accompanying diagram, explain what will happen to the market for loanable funds when there is a fall of percentage points in the expected future inflation rate. How will the change in the expected future inflation rate affect the equilibrium quantity of loanable funds?
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.
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.