Identify the impact on either the supply or demand of loanable funds following the events listed below. Answer bank in iamge Economic conditions deteriorate, prompting households to save a larger portion of their income. ____ will ____ In an effort to balance the budget, the government increases taxes paid by businesses. will Economic conditions improve, increasing the demand for goods and services. will Innovations in robotics technology vastly improves productivity within manufacturing firms. will

Identify the impact on either the supply or demand of loanable funds following the events listed below. Answer bank in iamge Economic conditions deteriorate, prompting households to save a larger portion of their income. will In an effort to balance the budget, the government increases taxes paid by businesses. will Economic conditions improve, increasing the demand for goods and services. will Innovations in robotics technology vastly improves productivity within manufacturing firms. will

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter21: Financial Markets, Saving, And Investment

Section: Chapter Questions

Problem 6P

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Similar questions

Loanable fund graph- show the result of a fiscal, crowding out and the effect on the supply of loanable funds
Collaboration with Congress during the Clinton Administration allowed for an aggressive deficit-cutting plan to pass. As a result, the government was able to reach a balanced budget at the end of the 90's. Move the supply and/or demand curves to describe the expected effect that this deficit-reduction likely had upon the loanable funds market. As a result, private investment should have a) decreased as the cost of borrowing increased. b) increased as the cost of borrowing increased. c) increased because the cost of borrowing decreased. d) decreased as the cost of borrowing decreased.
Question 1 & 2 Question 3Consider the effects of the following events in the loanable funds market model Briefly explain whether the supply or demand for loanable shifts (and in which direction) Briefly explain what happens to national savings, private investment spending, and real interest rates (a) An increase in government spending, ceteris paribus (b) Domestic businesses become optimistic about the future and this improves profitability prospects for businesses at any given real interest rate Question 4 Briefly explain why discouraged workers and part-time workers may contribute to theofficial unemployment rate understating true unemployment in the economy Question 5Countries with a low standard of living often have low levels of productivity List 6 reasonsthat may account for low levels of productivity in a nation
The stock market during 1998 and the first half of 1999 showed substantial strength. If the strong returns are expected to continue, how would this affect the supply of loanable funds?
What is the effect of an increase in the tax rate on interest income on the supply of and the demand of loanable funds Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.
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
Question 4 [Drawing upon the principles of the loanable funds market model, assume that the government slashes its spending while there is no change in taxation and holding constant all other factors in the economy. This policy is likely to have a positive effect on (planned) private investment in the economy. “Private investment” refers to investment in physical capital by firms and residential investment by households.
Graphically Show each scenario of the market for loanable funds and graph the supply and demand for each of the 4 scenarios. Draw the shift occurring (Supply or Demand) and explain what happens to the equilibrium interest rate in for each of the 4 scenarios 1. A breakthrough in medical technology results in many hospitals wanting to buy new equipment. 2. The government budget deficit is reduced by 50%. 3. Foreign investors buy residential property in the United States. 4. People around the world are worried about financial stability in their countries and choose to move their wealth to U.S. financial markets.
All other things equal, an increase in government borrowing will ________ a. shift the demand curve for loanable funds to the right, increasing interest rates. b. shift the supply curve of loanable funds to the right, decreasing interest rates. c. shift the demand curve for loanable funds to the left, decreasing interest rates. d. shift the supply curve of loanable funds to the left, but interest rates remain unchanged.
Suppose the long-term real interest falls. In the (private sector) loanable funds market. the result will be. a. the demand for loanable funds curve shifts to the right b. the supply of loanable funds curve shifts to the left c. the demand for Ioanable funds curve does not shift to the right nor does the supply of loanable funds cunve shift to the left d. the demand for loanable funds curve shifts to the right and the supply of loanable funds curve shifts to the left
if there is continuous increase in savings what will happen to loanable funds market and becase of technilogical innovation what will happen to loanable funds market.effect of decrease in deficit on loanable funds market .
Suppose government provides tax rebate to small business on their business-related expenditure. Assuming no change in government budgetary position, this policy is likely to have a positive effect on household (or private) saving in the economy (Hint: think about the effect of this policy in Loanable Funds Market) Is this statement true, false or uncertain? Please provide your explaination.