Which of the following situations represent investment or saving? Explain.  Your family takes out a mortgage and buys a new house.  You use your $200 paycheck to buy stock in AT&T.  Your roommate earns $100 and deposits it in his account at a bank.  You borrow $1,000 from a bank to buy a car to use in your pizza delivery business.

Q: uppose the government changes the tax code, allowing individuals to reduce their taxable income if…

A: According to the neoclassical theory of loanable fund, the interest rates are determined at point…

Q: What are some reasons why the investment strategy of a 30-year-old might differ from the investment…

A: Investments: It refers to the value of the fixed assets of an economy which is produced within a…

Q: Use the following graph to show the effects on the Market for Loanable Funds of many people deciding…

A: Saving refers to the act of setting aside a portion of one's income for future use, either in the…

Q: use the analysis for the market of loanble funds to illustrate and explain how the following…

A: Answer: Introduction: Saving: saving is known as the supply of loanable funds. The suppliers of…

Q: The economy of Dream Island, which is isolated from the rest of the world, has the supply of…

A: Demand curve for the loanable fund shows the level of demand for loan at different interest rate.…

Q: In detail what are some of the factors that affect demand for loanable funds according to the…

A: Demand is the total quantity of goods and services in the market for which the consumer is willing…

Q: People should buy bonds when they think that interest rates are as high as they will go.

A: A bond is a financial instrument that allows an issuer to raise capital by borrowing money from…

Q: to show the on the Market for Loanable Funds of many people deciding to play the lottery rather than…

A: If the people decides to play lottery rather than save money for investment then it leads to a fall…

Q: Suppose that the government changes the tax code to allow additional amounts of money to be placed…

A: Change in tax code leads to increase in supply of loanable fund in the market, thus the supply curve…

Q: According to Milton Friedman, when the public holds more cash balances than it desires at any level…

A: Thus, Friedman offers quantity theory as a theory of money demand, with money demand supposed to be…

Q: When an individual deposits her paycheck in her account at First National Bank, she is essentially:…

A: The loanable fund market shows the interaction of borrowers and savers and how they make decision…

Q: How do the sophisticated financial systems of modern economies affect the relationship between…

A: Financial markets (such as those in which stocks or bonds are traded), securities (from bank CDs to…

Q: If the government wants to increase the amount of savings in the economy, how should it alter…

A:

Q: If I had a federal budget that was typically balanced where new taxes causes $100 billion surplus.…

A: The federal budget is an itemized plan for the United States' yearly public spending. It is used to…

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: In which of the following situations is it most advantageous to be saving? Select one: A. The real…

A: Inflation is basically an increase in the value of commodities and services over a certain period of…

Q: First Call, Inc., a smartphone company, plans to build a factory-one that costs $14 million if the…

A: Market for loanable funds determines equilibrium interest rate where demand for loanable funds is…

Q: Figure 26-3. The figure shows two demand-for-loanable-funds curves and two supply-of-loanable-funds…

A: Answer - Need to find - A shift of supply curve from S1 to S2 is called  Given in the question - Two…

Q: Distinguish between saving and investment.

A: An important debate in macroeconomics relates to the relationship between saving and investment.…

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: Cindy takes a summer job and earns an after-tax income of $4,500. Her living expenses during the…

A: After-tax income is $4500 Expenses are $1000

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: Explain the assumption regarding consumers’ behavior in the life-cycle-permanent-income hypothesis…

A: According to the permanent income hypothesis, a consumer spending theory, people will spend money in…

Q: A Government issues a bond that pays 1000$ in 1 year. If the price of the bond is 920$, what is the…

A: Here, it is given that the government is paying an amount of $1000 for a bond, whose price is $920.

Q: Suppose real GDP is $5,136 billion, taxes collected by the government are $535 billion, government…

A: The savings refers to as the level of amount remaining after all the consumption expenditure…

Q: All other things equal, an increase in government borrowing will ________   a. shift the demand…

A: Government borrowing is financed thorough loanable funds. Increase in government borrowing means…

Q: Cindy takes a summer job and earns an after-tax income of $5,000. Her living expenses during the…

A: Saving is the part of income which is not spend or consume  so here we calculate the saving which…

Q: What group of people benefits from a higher interest rate? Explain how they benefit

A: Interest is the opportunity cost of holding money.

Q: c. Which of the following situations in c (i) & c (ii) represent investment? Saving? Explain (i)…

A: Saving: This defines that when a person's income exceeds his consumption is called savings which…

Q: If the demand for loanable funds by the business sector decreases because of a recession and the…

A: The lonable funds market includes determines the market interest rate and equilibrium quantity of…

Q: Suppose government provides tax rebate to small business on their business-related expenditure.…

A: There would be tax rebate for businesses.That would decrease the price of products and hence savings…

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

A: Bonds are defined as the fixed income securities issued by the private companies and government…

Q: You borrow $100 from one friend. You sell another friend an old cell phone case for $30. You give a…

A: As given $100 borrow from one friend and $30 recieve after selling an old cell phone case and $80…

Q: Scenario 1: Individual Retirement Accounts (IRAS) allow people to shelter some of their income from…

A: Loanable funds market, is the market where funds are being borrowed and lent. Lending of funds is…

Q: Debt financing of ever-increasing government spending combined with constant government revenue and…

A: When the countries transact budget deficits, they particularly pay for them by borrowing money. When…

Q: Scenario 1: Individual Retirement Accounts (IRAS) allow people to shelter some of their income from…

A: There are various factors that affect the demand and supply of loanable funds.

Q: Using the accompanying diagram, explain what will happen to the market for loanable funds when there…

A: Loanable Funds Market is the one where where the activity of borrowing takes place. Here, savers…