Draw a model for the market of loanable funds. Suppose the equilibrium interest rate is10 percent. Now, show the effects of a law that states no funds can be lent at a rate greater than 5 percent.
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Draw a model for the market of loanable funds. Suppose the equilibrium interest rate is10 percent. Now, show the effects of a law that states no funds can be lent at a rate greater than 5 percent.
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- 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.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.Using a supply and demand diagram, explain the following scenario impacts the market for loanable funds. Show your work, and be specific about what happens to the equilibrium. (b) The government starts a program that makes it easier for new homeowners to takeout a mortgage.
- How would the interest rate change as a result of the following?a. A rise in the demand for consumption loans _____________________________________________________________________________b. A decline in the supply of loanable funds ________________________________________________________________________________c. A rise in the demand for investment loans_______________________________________________________________________________Using a supply and demand diagram, explain the following scenario impacts the market for loanable funds. Show your work, and be specific about what happens to the equilibrium. (c) Technological improvements increase the profitability of investments for firms.Consider the market for loanable fund. Suppose that government started to give tax incentives for investment (so the cost of investment fell.) Answer which curve (Demand or Supply) would shift to which direction (Left or Right), and answer how the equilibrium saving would change (Decrease or Increase)Curve: Direction: Saving:
- If there is a surplus of loanable funds, the quantity demanded is A. less than the quantity supplied and the interest rate will rise. B. less than the quantity supplied and the interest rate will fall. C. greater than the quantity supplied and the interest rate will fall. D. greater than the quantity supplied and the interest rate will rise.Using a supply and demand diagram, explain the following scenario impacts the market for loanable funds. Show your work, and be specific about what happens to the equilibrium. (d) People’s values change, and they start to save more of their income.Need help with Econ question ASAP! Using a supply and demand diagram, explain the following scenario impacts the market for loanable funds. Show your work, and be specific about what happens to the equilibrium. (b) The government starts a program that makes it easier for new homeowners to takeout a mortgage.
- 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 decreasesThree students have each saved $1,000. Each has an investment opportunity in which he or she can invest up to $2,000.Here are the rates of return on the students' investment projects: Harry 5 percent Ron 8 percent Hermione 20 percent a. If borrowing and lending are prohibited, each student uses only personal savings to finance his or her own investment project, how much will each student have a year later when the project pays its return? b. Now suppose their school opens up a market for loanable funds in which students can borrow and lend among themselves at an interest rate r. What would determine whether a student would choose to be a borrower or lender in this market? c. Among these three students, what would be the number of loanable funds supplied and quantity demanded at an interest rate of 7 percent? At 10 percent? d.At what interest rate would the loanable funds market among these three students be in equilibrium? At this interest rate,…Suppose that the government is concerned with the unemployment rate and, as a response, offers a tax credit to any firm that builds a new factory in the United States. Show the effect of this policy on the market for loanable funds by shifting the appropriate curve in the graph in the attached image.
