Using loanable funds model, explain how tax cuts for businesses will impact the interest rate and supply & demand for funds.

Q: Commercial banks play an important role in the financial system and the economy. As a key component…

A: Commercial banks : In simple words, A commercial bank can be understood as the financial institution…

Q: All of the following are sustainable methods businesses can use to raise capital (funding) except…

A: Answer:   Option 4

Q: Which of the following is a reason that banks may favor fee compensation over balance compensation?…

A: In order to increase their deposits and use them for loan, banks usually prefer fee compensation…

Q: explain how this will impact the supply of and demand for loanable funds and the interest rate in…

A: Let us consider an initial situation where the tax cuts for the business sector have not yet been…

Q: What are annuities, growing annuities, perpetuities and growing perpetuities. What are the…

A: Annuity is a sequence of equal payments that take place over a fixed number of periods. Payments…

Q: How can finance managers access and monitor the health and performance of a company?

A: This question explains about the finance managers access and monitor the health and performance of a…

Q: Explain what happens in a small open economy when the government changes the tax laws to encourage…

A: An incentive is a perk or benefit given to someone in order to encourage him to do something…

Q: Suppose your firm raises funds from outside lenders. What type of agency costs might occur? How…

A: Agency cost is the internal cost that arises internally within the firm. It can happen due to peer…

Q: what is the impact on the Loanable Funds Market

A: Loan-able funds are the amount or the funds available in the loan market for the borrowers. These…

Q: part-a: What is the difference between direct finance and indirect finance?  part-b: What are the…

A: Since you have posted a question with multiple subparts, we will solve first three sub parts for…

Q: A).How can we use capital markets to achieve both financial inclusion and financial literacy?…

A: Capital markets-It is a place where stocks, bonds, derivatives and commodities  are traded i.e., a…

Q: What are two monetary policies that could be implemented by the central bank which would have the…

A: Federal bank achieve of economic growth by monetary policy by increasing or decreasing money supply.

Q: financial strengths and weaknesses? What a

A: Financing refers to the procedure of raising funds or money from various sources such as banks,…

Q: In certain scenerios, some companies may choose to finance with a bank loan specifically because of…

A: Interest payment deduction can be claimed on borrowings while computing business income provided…

Q: Write Importance of sources of finance. What are the Advantages and Disadvantages of medium term…

A: Source of finance refers to the ways in which the business gets funds to start and execute its…

Q: Companies borrow because it is in their best interests financially.

A: The given statement is True..... Companies borrow because it is in their best interests…

Q: What is the best explanation for the recent increase in assets held by mutual funds and other…

A: Mutual fund: It is the professionally handle investment funds poled from various investors.

Q: Through utilizing fiscal policy, i.e. varying ________ and/or ___________, governments achieve goals…

A: The correct answer is given in the following steps for your reference in the following steps.

Q: Why do the companies in high tax brackets incur lower after-tax interest costs by financing through…

A: Debts are the liability issued by the company to raise funds. The debt holder receives fixed…

Q: The _____ rate is the lending rate at which the largest and most creditworthy corporations borrow…

A: The lending of money is dependent upon the credit rating of a corporation. Higher the rating, lower…

Q: In recent years, ‘direct lenders’ and ‘shadow banks’ have increasingly provided funding for…

A: The lending agencies are the financial institutions that provide funds to the public, business…

Q: A household that is a net borrower owes more money to its creditors than it has saved or has lent…

A: If there is increase in the interest rates in an economy, the income effect will drive their current…

Q: How can a federal budget deficit increase market equilibrium interest rates and reduce private…

A: The federal budget is the budget prepared by the government for the purpose of considering the…

Q: Savings rate, Recession, Depression are factors relating to: a. Macroeconomic environment b.…

A: Macroeconomic environment deals with the study of total economy on a broad view scale. Where as…

Q: The financial markets play an important role in channeling funds from savers to borrowers. Which of…

A: Ans.(Option C) Investors deposit funds into interest-bearing accounts which are then loaned to…

Q: QUESTION ONE  The followings are true about the concept of social finance EXCEPT,       A )…

A: Social finance is the third sector of finance that aims to serve something for society. Some of the…

Q: hich of the following is leakages from the circular flow in a closed economy?   a. household…

A: Leakage is usually used in relation to a particular depiction of the flow of income within a system,…

Q: What tax rate should be used in calculating the taxes on the investment's projected income?

A: Investment: It refers to the process of using the currently held excess cash to earn profitable…

Q: 23 Return Submit Taxes used for Medicare and Social Security An expenditure, such as mortgage…

A: Different financial terms are given in the problem we have to match them appropriately.

Q: How is securitization supposed to help banks and S&Ls manage risks andincrease homeowners’…

A: Securitization is a method in which assets are converted in securities by using financial tools.…

Q: What is the best explanation for the recent increase in assets held by mutual funds and other…

A: Mutual Fund is investment option where mass number of people pool their money under professional…

Q: How would an increase in corporate taxes tend to affect an average firm’s capitalstructure? What…

A: A corporate tax is a tax charged on the profits of a corporation. The personal tax is a tax charged…

Q: How much interest rate is considered favorable for businesses in lending investment capital

A: When interest rates are rising, both consumers and businesses will cut back on spending. This will…

Q: In order to earn money, how do financial institutions do it? What conditions restrict their ability…

A: Introduction: Financial markets are the exchanges on which financial assets and instruments are…

Q: Describe payday loans, tax-refund advances and structured-settlement advances—the  differences…

A: Payday loans are also sometimes known as cash advances. These are unsecured loans with maturity…

Production Budget

A budget can be defined as a financial plan designed by an undertaking for a definite period in the future that can contribute towards enhancing the financial success of the business undertaking. It is used to estimate the revenue and expenses. The budget generally takes into account both current and future income and expenses.