Bundle: Exploring Macroeconomics, Loose-leaf Version, 7th + LMS Integrated MindTap Economics, 1 term (6 months) Printed Access Card
7th Edition
ISBN: 9781305784802
Author: Robert L. Sexton
Publisher: Cengage Learning
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Chapter 13, Problem 8P
To determine
To explain:
The change in the equilibrium interest rate, loanable fund's supply curve, level of loanable funds in the economy and the rate of
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Check out a sample textbook solutionStudents have asked these similar questions
Name and explain on the example of your interest one factor that caused the shift of the
supply for loanable funds?
Draw the curve that supports it.
Draw a graph of the supply and demand of loanable funds. Then, show how the interest rate will be
affected when the following scenarios occur:
a. The government implements a program that reduces investment tax credits.
b. The government budget deficit is reduced by 30%. (Hint: Does the government still need to borrow?)
c. More foreigners are saving their money in U.S. banks.
Usually, when the supply of loanable funds increases, then interest rates
Select one:
a. Might increase or decrease.
b. Increase.
c. Remain unchanged.
d. Decrease.
Chapter 13 Solutions
Bundle: Exploring Macroeconomics, Loose-leaf Version, 7th + LMS Integrated MindTap Economics, 1 term (6 months) Printed Access Card
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Similar questions
- What happens to the quantity of loanable funds supplied when the interest rate rises? Explain why this change happens?arrow_forwardUsing 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. (a) The government increases its debt, thus crowding out the loanable funds market.arrow_forward1. If the following policies were implemented, how would it affect the market for loanable funds, interest rates, investment and economic growth. Explain by using diagrams.a) A change in tax code that might increase private saving. b) Increase in government spending and also budget deficits.arrow_forward
- If the following policies were implemented, how would it affect the market for loanablefunds, interest rates, investment and economic growth. Explain by using diagrams. a) A change in tax code that might increase private saving. b) Increase in government spending and also budget deficits.arrow_forwardIn an unhindered free market, the supply and demand for loanable funds and, hence, the going rate of interest are driven by: The amount of money printed by the U.S. Treasury Time preferences of market participants Animal spirits The amount of deposits in the Federal Reservearrow_forwardExplain and draw each of the following parts (A,B,C), with each explantion given below: ( Graph hand written upload on Moodle as on imege). A. Market for loanable fund. B. Government policy investment incentives. C. Government policies saving incentives.arrow_forward
- what do you mean by financial inclusion, market-friendly environment, and fiscal incentive system in terms of policy recommendations?arrow_forwardWhat is demand for Loanable Funds and what are the fields where from these Demand for Loanable funds comes?arrow_forwardConsider the market for loanable funds.if expectations about South Africa's future economic performance are negative such that firms cancel plans to build new equipment and factories then in the short run we would expect i. Demand for loanable funds to increase ii. Supply of loanable funds to decrease iii.supply wi increase and demand for loanable funds to decrease iv. Interest rate to decreasearrow_forward
- If foreign income and wealth decrease, this would most likely a. not affect the market for loanable funds. b. cause the supply of loanable funds to increase. c. cause the supply of loanable funds to decrease. d. cause the demand for loanable funds to increase in order for foreigners to maintain consumption. e. cause the demand for loanable funds to decrease.arrow_forwardExplore the consequences for a hypothetical developing economy, if the the rate of borrowing to fund a fiscal deficit is growing annually at a faster rate than GDP. In your answer, use hypothetical numbers and percentages, include a graphical analyses.arrow_forwardWhat do loanable funds finance? What is the source of loanable funds? Loanable funds finance _______. A. business investment, the government budget surplus, and international borrowing B. business investment, the government budget deficit, and international investment or lending C. private saving, the government budget surplus, and international borrowing D. private saving, the government budget deficit, and international investment or lendingarrow_forward
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