EBK ECONOMICS
13th Edition
ISBN: 8220106799642
Author: PARKIN
Publisher: PEARSON
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Chapter 29, Problem 9APA
To determine
Graphically illustrate the effect of the new technology in the loanable funds market.
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The demand for loanable funds has a ________ slope because the lower the interest rate, the ________ number of investment projects are profitable, and the ________ the quantity of loanable funds demanded.
A.
negative; lesser; greater
B.
positive; lesser; lesser
C.
negative; greater; greater
D.
positive; greater; greater
E.
negative; greater; lesser
QUESTION 14
The statement "This Dell laptop costs $1,200" illustrates which function of money?
A.
Liquidity.
B.
Medium of exchange.
C.
Standard of deferred payment.
D.
Store of value.
E.
Unit of account.
12. Suppose the interest rate decreases. Other things constant, how will the loanable funds market be affected?
a. The demand for loanable funds curve will shift to the right.
b. The demand for loanable funds curve will shift to the left.
c. The quantity of loanable funds demanded will increase.
d. The quantity of loanable funds supplied will increase.
13. Suppose a research lab fired a chemist, and then an environmental protection group hired the chemist at the same
salary. What would be the net effect of these events on aggregate demand?
a. The aggregate demand would shift rightward.
b. The aggregate demand would shift leftward.
c. The aggregate demand would become steeper.
d. The aggregate demand would remain the same.
c. If the Federal Reserve sells government bonds, show what will happen to this graph. Explain the effects on interest rates and the quantity of loanable funds
Chapter 29 Solutions
EBK ECONOMICS
Ch. 29.1 - Prob. 1RQCh. 29.1 - Prob. 2RQCh. 29.1 - Prob. 3RQCh. 29.1 - Prob. 4RQCh. 29.1 - Prob. 5RQCh. 29.2 - Prob. 1RQCh. 29.2 - Prob. 2RQCh. 29.2 - Prob. 3RQCh. 29.2 - Prob. 4RQCh. 29.2 - Prob. 5RQ
Ch. 29.2 - Prob. 6RQCh. 29.2 - Prob. 7RQCh. 29.3 - Prob. 1RQCh. 29.3 - Prob. 2RQCh. 29.3 - Prob. 3RQCh. 29.3 - Prob. 4RQCh. 29.3 - Prob. 5RQCh. 29.3 - Prob. 6RQCh. 29.4 - Prob. 1RQCh. 29.4 - Prob. 2RQCh. 29.4 - Prob. 3RQCh. 29.4 - Prob. 4RQCh. 29 - Prob. 1SPACh. 29 - Prob. 2SPACh. 29 - Prob. 3SPACh. 29 - Prob. 4SPACh. 29 - Prob. 5SPACh. 29 - Prob. 6SPACh. 29 - Prob. 7SPACh. 29 - Prob. 8SPACh. 29 - Prob. 9APACh. 29 - Prob. 10APACh. 29 - Prob. 11APACh. 29 - Prob. 12APACh. 29 - Prob. 13APACh. 29 - Prob. 14APACh. 29 - Prob. 15APACh. 29 - Prob. 16APACh. 29 - Prob. 17APACh. 29 - Prob. 18APACh. 29 - Prob. 19APACh. 29 - Prob. 20APACh. 29 - Prob. 21APACh. 29 - Prob. 22APACh. 29 - Prob. 23APACh. 29 - Prob. 24APA
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Similar questions
- The following graph shows the supply and demand curves in the market for loanable funds when actual inflation and expected inflation are zero, Suppose the expected inflation rate increases to 1%. Adjust the following graph to show the effect of this increase in the expected inflation rate. INTEREST RATE 9 200 300 QUANTITY OF LOANABLE FUNDS 100 400 Du 2arrow_forwardAn economy's saving rate increased from -0.1 percent in 2015 to 2.0 percent in 2016 to 2.4 percent in 2017, to 2.9 percent in 2018, and to 3.0 percent in 2019. Explain why the saving rate might have increased and its effect on the supply of loanable funds. The saving rate might have increased because The increase in the saving rate will the supply of loanable funds. A. financial market turmoil could decrease wealth and expected future income; increase B. the demand for loanable funds could have decreased; decrease C. financial market turmoil always increases wealth and expected future income; increase D. financial market turmoil could decrease wealth and expected future income; decrease O E. the demand for loanable funds could have decreased; increase Click to select your answer. javascript:doExercise(13); esc 吕0 888 F1 F2 F3 F4 F5 F6 F7 F8 F9 F10 ! @ # 2$ & 1 2 3 4 5 7 8 Q W E Y tab Tarrow_forwardShow the effect on the real interest rate and equilibrium quantity of loanable funds of a decrease in the demand for loanable funds and a smaller decrease in the supply of loanable funds. Draw a demand for loanable funds curve. Label it DLF0. Draw a supply of loanable funds curve. Label it SLF0. Draw a point at the equilibrium real interest rate and quantity of loanable funds. Label it 1. Draw a curve that shows a decrease in the demand for loanable funds. Label it DLF1. Draw a curve that shows a smaller decrease in the supply of loanable funds. Label it SLF1. Draw a point at the new equilibrium real interest rate and quantity of loanable funds. Label it 2.arrow_forward
- Hi I need help with all of the parts, I keep getting it wrongarrow_forwardGraphically 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.arrow_forwardScenario 1: The economy enters a recession driving down the demand for homes nationwide. 1. What is the expected impact on the demand for loanable It will decrease. 2. What effect will this change have on the interest rate? It will decrease because when the demand decreases the interest rate will also decrease. 3. How will this change the behavior of consumers? ct in gre enarrow_forward
- What is the effect of a fall in the real interest rate on the demand for loanable funds? A fall in the real interest rate _______. A. decreases the demand for loanable funds and shifts the demand curve leftward B. decreases the quantity of loanable funds demanded up along the demand curve C. increases the demand for loanable funds and shifts the demand curve rightward D. increases the quantity of loanable funds demanded down along the demand curve Thanks!arrow_forwardWhat is the effect of a fall in the real interest rate on the demand for loanable funds? A fall in the real interest rate _______. A. increases the quantity of loanable funds demanded down along the demand curve B. decreases the quantity of loanable funds demanded up along the demand curve C. decreases the demand for loanable funds and shifts the demand curve leftward D. increases the demand for loanable funds and shifts the demand curve rightwardarrow_forwardDraw 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.arrow_forward
- Investment — End of Chapter Problem Move the appropriate curve or curves in each graph to illustrate the effect of each of the four events on the market for loanable funds. If the event should not impact the market for loanable funds, then leave the graph unchanged.arrow_forwardComplete the following statements. a. Dan saves a portion of his income in an interest-earning account. In the loanable funds market, Dan is b. John owns a pizzeria and needs to borrow money for a new oven. In the loanable funds market, John is c. Savers like Dan are likely to save more when the real interest rate . Therefore, the supply of loanable funds Look at images for word bank . d. Borrowers like John are likely to borrow more when the real interest rate . Therefore, the demand for loanable funds .arrow_forward1. Using the market for loanable fund diagram, show graphically and explain how the interest rate and investment are affected in each of the following cases. (Draw a separate diagram for each.)i. Tax on interest income decreases.ii. Government is running a budget surplus.iii. Investment tax credit falls.arrow_forward
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