How do the sophisticated financial systems of modern economies affect the relationship between saving and investment?

Q: What might deter a policymaker from trying to raise the rate of saving?

A: Higher saving implies fewer resources are needed to make more consumption goods to produce capital…

Q: Mr. John Dela Cruz, wanted to start investing in the stock market, which of the following financial…

A: In a market, there are different industries and different types of markets for different types of…

Q: What does the net investment test indicate?

A: Net investment is the net amount of money a business spends on capital assets, minus the…

Q: Give at least three examples of how savings can be channeled into productive investment. Why is…

A: Examples of how savings can be channeled into productive investment: When households save their…

Q: What are the financial markets? What are the parties of the capital market?Explain it.

A: For the smooth operation of a capitalistic system, entrepreneurs and businesses rely on finance that…

Q: How does the financial system coordinate saving and investment?

A: By using the loanable fund as a tool, the financial system coordinates saving and investment in the…

Q: would bonds still be a good option for investment if interest rates are negative?

A: Negative-yielding bonds are monetary instruments that cause buyers to lose cash.  They are typically…

Q: Suppose we have a financial market where Qd = −1r + 26 Qs = 1.5r + 1 a. What is the equilibrium…

A: The equilibrium interest rate can be calculated by equating demand and supply functions as follows:…

Q: What is the Investment-Pool Concept?

A: The income of the individuals, and households is used for various purposes. The income taxes are…

Q: If the Federal Reserve sells government bonds, show what will happen to this graph. Explain the…

A: According to the question, the Federal Reserve sells government bonds. When bonds are sold, interest…

Q: Suppose there is a decrease in the demand for investment, and increase in saving in an economy. Show…

A: An investment curve is downward sloping due to the negative relationship between interest rate and…

Q: What is the financial market, what does it do in terms of saving investment and interest rates

A: A market is a place where the exchange of goods and services takes place between the consumers and…

Q: Suppose that the city of New York issues bonds to raise money to pay for a new tunnel linking New…

A: Investment is considered an important component of economic growth. It can be categorized into two…

Q: What is the impact of a change in the savings rate on the output?

A: When savings rate increases (decreases), people increase (decrease) current saving and decrease…

Q: What are the different types of investmen

A: Investment is the new expenditure on physical assets such as machines, buildings, tools and…

Q: Complete the following table by calculating private saving, public saving, national saving,…

A: Here we can find the following terms which are as follow-

Q: Briefly explain the yearly rate-of-return method that policyowners can use to determine the rate of…

A: A profit from an investment is referred to as a return. It includes any change in the investment's…

Q: A consumer is making saving plans for this year and next. She knows her real income after taxes…

A: Intertemporal Choice is defined as the decisions such as the spending habits which can affect the…

Q: Consider a period in which stock prices are very high, such that investors begin to think that…

A: Equilibrium in the loanable funds market is at such interest rate where quantity of loanable funds…

Q: Laurasia has $ 100 billion in Public Savings and $ 600 billion in Private Savings. What is…

A: The national savings rate is defined as the percentage of gross domestic product which is saved by…

Q: One of the biggest problems for any economy is to figure out how to get or transfer money from…

A: Financial markets are very important for the economy. Financial markets include capital market and…

Q: Suppose Indian government borrows 50,000/- more next year than this year. Use a supply-and-demand…

A: Meaning of Demand and Supply: The term demand refers to the willingness of an individual to…

Q: The Economist article, "Low interest rates leave savers with few good options", states that savers…

A: Poeple save money for different reasons. Savings allow people to meet future expenses. Setting cash…

Q: What role do commercial banks play in the development of an economy

A: The commercial banks play a vital role in any economy. Developed commercial bank systems ensure and…

Q: Laurasia has $-300 billion in Public Savings and $ 900 billion in Private Savings. What is…

A: The national income(Y) identity is Y=C+I+G Y:National income C:Consumption expenditure I:Investment…

Q: What is the significance of financial markets in the country’s economy?

A: Financial market: - it is a market for financial securities where people buy and sell financial…

Q: If net personal taxes rise, what happens to private saving ? Public saving ?

A: In an economy, taxes refers to the expenditure by the people and revenue of the government because…

Q: What is importance of financial markets for the productive capacity of the economy?

A: The economies work with the motive of increasing, or enhancing their overall economic growth, and…

Q: The importance of income in determining savings has persisted since the time of Keynes. Why have…

A: Keynes: It refers to the economic theory under which economy's total spending and its effect are…

Q: Why is there a trade-off between the amount of consumption that people can enjoy today and the…

A: Why is there a trade-off between the amount of consumption that people can enjoy today and the…

Q: Describe the simple investment?

A: Investment refers to buying financial assets like shares and bonds to earn interest rates. Rate of…

Q: Classify each of the following based on the macroeconomic definitions of saving and investment.…

A: Answer: Introduction: Saving: it refers to the extra income left after consumption. A person can…

Q: What is the relationship between interest rates and business investment?

A: To determine the relationship between interest rates and investments.

Q: If Congress instituted an investment tax credit, the interest rate would Select one: a.rise and…

A: a. rise and saving would rise

Q: For each of the following pairs, which bond would you expect to pay a higher interest rate? Explain!…

A: Hello, thank you for the question. Since there are multiple questions asked here, only the first…

Q: How is physical capital related to financial capital?

A: Physical capital refers to the tangible goods that are produced by the company.  Examples raw…

Q: Which of the following situations represent investment or saving? Explain.  Your family takes out a…

A: Note- Since you've asked multiple question, we'll only solve the first question for you. If you want…