if the government decreased taxes on interest earnings to business and individuals and at the same...
if the government decreased taxes on interest earnings to business and individuals and at the same time increased the budget deficit do you think it is possible that the quantity amount of loanable funds could remain the same while interest rates significantly increased
Homework Answers
This is not possible
Decreased taxes on interest earnings will encourage private savings which means the supply curve of loanable funds will shift to the right
Increased budget deficit implies that government experiences a decline in public saving. This will shift the supply curve loanable funds to the left.
As a result, if both shifts are equal in size, there will be no change in the rate of interest or in the equilibrium quantity of loanable funds demanded and supplied.
Add Answer to:
if the government decreased taxes on interest earnings to
business and individuals and at the same...
Suppose the government decides to reduce both government expenditures and taxes by the same amount (this...
Suppose the government decides to reduce both government expenditures and taxes by the same amount (this is a “balanced budget” change). What happens to: (i) national saving; (ii) the real interest rate; (iii) investment; (iv) consumption; and (v) output? Illustrate graphically using the The loanable funds market graph and explain in words why these variables change or why they do not change.
Indicate the correct answer and why, show work. Thank you The table shows the demand for...
Indicate the correct answer and why, show work. Thank you
The table shows the demand for loanable funds schedule and the supply of loanable funds schedule when the government budget is balanced. If the government budget deficit is $1.0 trillion and the Ricardo-Barro effect occurs, what are the real interest rate and the Real Loanable funds Loanable funds interest rate demanded supplied quantity of investment? If the Ricardo-Barro effect occurs, and if the government budget deficit is $1.0 trillion, the...
In a closed economy, private saving is smaller than investment if government spending exceeds tax revenue....
In a closed economy, private saving is smaller than investment if government spending exceeds tax revenue. Select one: True False If there is a surplus of loanable funds, then neither curve shifts, but the quantity of loanable funds supplied increases and the quantity demanded decreases as the interest rate rises to equilibrium. Select one: True False An increase in the budget deficit would cause a shortage of loanable funds at the original interest rate, which would lead to falling interest...
7. Dawn states: “As a result of a spending increase by the federal government the budget...
7. Dawn states: “As a result of a spending increase by the federal government the budget deficit increase and this will lead to a decrease in Demand in the loanable funds market and result in lower real interest rates. Do you agree or disagree? Carefully Explain.
6. Suppose there is a surplus in the market for loanable funds. Is the interest rate...
6. Suppose there is a surplus in the market for loanable funds. Is the interest rate above or below its equilibrium level? How do saving and investment at this interest rate be compared? Which one is greater? 7. If at some interest rate desired investment is $400 billion, desired private saving is $600 billion, and the budget deficit is $300 billion, is there a surplus or a shortage in the market for loanable funds? What does this imply would happen...
28. Other things the same, a government budget deficit a. reduces public saving, but not national saving. (b. red...
28. Other things the same, a government budget deficit a. reduces public saving, but not national saving. (b. reduces national saving, but not public saving. c. reduces both public and national saving. d. reduces neither public saving nor national saving. 30. Other things the same, an increase in taxes with no change in government purchases makes national saving a rise. The supply of loanable funds shifts right. b. rise. The demand for loanable funds shifts right. c. fall. The supply...
When government spending increases and taxes are increased by an equal amount, interest rates: A. Increase B. decrease C....
When government spending increases and taxes are increased by an equal amount, interest rates: A. Increase B. decrease C. remain the same. D. can vary wildly. Reset Selection
QUESTIONS Interest $100 Quantity of loanable funds (billions of dollars) Which might produce a new equilibrium...
QUESTIONS Interest $100 Quantity of loanable funds (billions of dollars) Which might produce a new equilibrium interest rate of 8% and a new equilibrium quantity of loanable funds of 375 Million O Households increase their consumption while disposable income stays constant Capital inflows from foreign citizens increase. Profit expectations are more optimistic for business investments, The government's budget deficit shrinks.
3. E ffects of a government budget deficit Consider a hypothetical open economy. The following table presents data on the relationship between various real interest rates and national saving, domesti...
3. Effects of a government budget deficit Consider a hypothetical open economy. The following table presents data on the relationship between various real interest rates and national saving, domestic investment, and net capital outflow in this economy, where the currency is the U.S. dollar. Assume that the economy is currently experiencing a balanced government budget. Given the information in the preceding table, use the blue points (circle symbol) to plot the demand for loanable funds. Next, use the orange points (square symbol)...
7. If at some interest rate desired investment is $400 billion, desired private saving is $600...
7. If at some interest rate desired investment is $400 billion, desired private saving is $600 billion, and the budget deficit is $300 billion, is there a surplus or a shortage in the market for loanable funds? What does this imply would happen to interest rates? 8. In a closed economy, GDP is $1000, government purchases are $200, and consumption is $700. If the government has a budget surplus of $25, what are investment, taxes, private saving, public saving and...
Indicate the correct answer and why, show work. Thank you
The table shows the demand for loanable funds schedule and the supply of loanable funds schedule when the government budget is balanced. If the government budget deficit is $1.0 trillion and the Ricardo-Barro effect occurs, what are the real interest rate and the Real Loanable funds Loanable funds interest rate demanded supplied quantity of investment? If the Ricardo-Barro effect occurs, and if the government budget deficit is $1.0 trillion, the...
7. Dawn states: “As a result of a spending increase by the federal government the budget deficit increase and this will lead to a decrease in Demand in the loanable funds market and result in lower real interest rates. Do you agree or disagree? Carefully Explain.
28. Other things the same, a government budget deficit a. reduces public saving, but not national saving. (b. reduces national saving, but not public saving. c. reduces both public and national saving. d. reduces neither public saving nor national saving. 30. Other things the same, an increase in taxes with no change in government purchases makes national saving a rise. The supply of loanable funds shifts right. b. rise. The demand for loanable funds shifts right. c. fall. The supply...
QUESTIONS Interest $100 Quantity of loanable funds (billions of dollars) Which might produce a new equilibrium interest rate of 8% and a new equilibrium quantity of loanable funds of 375 Million O Households increase their consumption while disposable income stays constant Capital inflows from foreign citizens increase. Profit expectations are more optimistic for business investments, The government's budget deficit shrinks.
Most questions answered within 3 hours.
-
Arbitration of disputes under the purview of "lemon laws" under
state statute is:
not required by...
asked 1 minute from now -
Describe three pieces of evidence that mitochondria and evolved
from symbiotic mutualisms between a eukaryote (or...
asked 5 minutes ago -
An AM transmitter with a carrier power of 20 kW is connected to
a 50 Ω...
asked 14 minutes ago -
JAVA
Beginnings of a paper-rock-scissors game.
Paper-rock-scissors is a game often used to make decisions.
There...
asked 18 minutes ago -
Consider a concept learning example of 5 attributes. Attributes
can take one of (5,3,2,2,6) values respectively....
asked 24 minutes ago -
Red light of wavelength 675 nm is incident on a slit of width
4.56 × 10−6...
asked 34 minutes ago -
An object 4.0 mm high is on the optical axis of two lenses with
focal lengths...
asked 31 minutes ago -
Suppose that each team in a league has a demand curve for
generic advertising (a league-wide...
asked 31 minutes ago -
1. The WJC purchases denim. The avg. daily demand of
western is 1000 yards and the...
asked 39 minutes ago -
Memory Allocation
a) Is it possible to have both internal and external
fragmentation with fixed partition...
asked 40 minutes ago -
Steven can afford car payments of $300 a month for 72 months.
The bank will lend...
asked 56 minutes ago -
Embedded
System..
1.
Analyze
the instruction
sets below.
LDR R1, [R0,
#0x08]
SUB R1, R1,
R2,...
asked 1 hour ago