Homework Answers
Correct Answer:
Decrease
Increase
With increase in capital inflow in the economy, supply of loanable funds will increase. It will put downward pressure upon the interest rates and equilibrium interest rate will decrease.
Further, it will cause investment spending to increase, because interest rate is lower.
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5. The loanable funds market Aa Aa In each of the following diagrams adjust either the...
7. Understanding the Fisher effect Aa Aa The following graphs show the loanable funds market. The...
7. Understanding the Fisher effect Aa Aa The following graphs show the loanable funds market. The upward-sloping orange line represents the supply of loanable funds, and the downward-sloping blue line represents the demand for loanable funds. For each of the following scenarios, use the graph to show how the market will react to the given change in the expected future inflation rate. The following graph shows the demand and supply curves for loanable funds when the expected future inflation rate...
In a different scenario, suppose that the demand and supply curves for loanable funds shown on...
In a different scenario, suppose that the demand and supply curves for loanable funds shown on the following graph occur when the expected future inflation rate is 5%. Then, a sudden shock to the economy causes the expected future inflation rate to rise to 9.6%. Assuming the Fisher effect holds, show the impact that this will have on the loanable funds market by shifting one or both curves on the following graph Tool tip: Click and drag one or both...
The following graph shows the market for cars in 2010
The following graph shows the market for cars in 2010 . Between 2010 and 2011, the equilibrium price of cars remained constant, but the equilibrium quantity of cars decreased. From this, you can conclude that between 2010 and 2011, the supply of cars _______ and the demand for cars _______ .Adjust the graph to illustrate your answer by showing the positions of the supply and demand curves in 2011.Note: Select and drag one or both of the curves to the...
8. Short-run and long-run effects of a shift in demand Aa Aa Suppose that the chicken...
8. Short-run and long-run effects of a shift in demand Aa Aa Suppose that the chicken industry is in long-run equilibrium at a price of $3 per pound of chicken and a quantity of 600 million pounds per year. Suppose the Surgeon General issues a report saying that eating chicken is good for your health. The Surgeon General's report will cause consumers to demand chicken at every price. In the short run, firms will respond by Shift the supply curve,...
The following graph shows the market for roses in 2007
A supply and demand puzzleThe following graph shows the market for roses in 2007 . Between 2007 and 2008 , the equilibrium quantity of roses remained constant, but the equilibrium price of roses decreased. From this, you can conclude that between 2007 and 2008 , the supply of roses _______ and the demand for roses _______ Adjust the graph to Illustrate your answer by showing the positions of the supply and demand curves in 2008 .Note: Select and drag one or...
The following graph shows the market for cars in 2008. Between 2008 and 2009, the equilibrium price of cars remained constant
The following graph shows the market for cars in 2008. Between 2008 and 2009, the equilibrium price of cars remained constant, but the equilibrium quantity of cars decreased. From this, you can conclude that between 2008 and 2009, the supply of cars _______ and the demand for cars _______ .Adjust the graph to illustrate your answer by showing the positions of the supply and demand curves in 2009. Note: Select and drag one or both of the curves to the desired...
8. A supply and demand puzzle The following graph shows the market for roses in 2010....
8. A supply and demand puzzle The following graph shows the market for roses in 2010. Between 2010 and 2011, the equilibrium quantity of roses remained constant, but the equilibrium price of roses increased. From this, you can conclude that between 2010 and 2011, the supply of roses _______ and the demand for roses _______ .Adjust the graph to illustrate your answer by showing the positions of the supply and demand curves in 2011. Note: Select and drag one or both of...
The following graph shows the market for laptops in 2007 . Between 2007 and 2008, the equilibrium price of laptops remained constant, but the equilibrium quantity of laptops increased.
A supply and demand puzzleThe following graph shows the market for laptops in 2007 . Between 2007 and 2008, the equilibrium price of laptops remained constant, but the equilibrium quantity of laptops increased. From this, you can conclude that between 2007 and 2008, the supply of laptops _______ and the demand for laptops _______ Adjust the graph to illustrate your answer by showing the positions of the supply and demand curves in 2008 .Note: Select and drag one or both of...
The following graph shows the market for cars in 2010. Between 2010 and 2011, the equilibrium...
The following graph shows the market for cars in 2010. Between 2010 and 2011, the equilibrium quantity of cars remained constant, but the equilibrium price of cars decreased. From this, you can conclude that between 2010 and 2011, the supply of cars increased and the demand for cars decreased . Adjust the graph to illustrate your answer by showing the positions of the supply and demand curves in 2011. Note: Select and drag one or both of the curves to...
7. Using the bond-market diagram below, drag the bond demand or bond supply curves (or both)...
7. Using the bond-market diagram below, drag the bond demand or bond supply curves (or both) to illustrate how an increass bond risk affects equilibrium bond price and quantity. Assume that investors are risk-averse Tool tip: Click and drag one or both of back to its original position. just try again and drag it a little farther. When you are satishied with your answer, click the Submit Answer button. the curves. Curves will snap into position, so if you try...
7. Understanding the Fisher effect Aa Aa The following graphs show the loanable funds market. The upward-sloping orange line represents the supply of loanable funds, and the downward-sloping blue line represents the demand for loanable funds. For each of the following scenarios, use the graph to show how the market will react to the given change in the expected future inflation rate. The following graph shows the demand and supply curves for loanable funds when the expected future inflation rate...
In a different scenario, suppose that the demand and supply curves for loanable funds shown on the following graph occur when the expected future inflation rate is 5%. Then, a sudden shock to the economy causes the expected future inflation rate to rise to 9.6%. Assuming the Fisher effect holds, show the impact that this will have on the loanable funds market by shifting one or both curves on the following graph Tool tip: Click and drag one or both...
The following graph shows the market for cars in 2010 . Between 2010 and 2011, the equilibrium price of cars remained constant, but the equilibrium quantity of cars decreased. From this, you can conclude that between 2010 and 2011, the supply of cars _______ and the demand for cars _______ .Adjust the graph to illustrate your answer by showing the positions of the supply and demand curves in 2011.Note: Select and drag one or both of the curves to the...
8. Short-run and long-run effects of a shift in demand Aa Aa Suppose that the chicken industry is in long-run equilibrium at a price of $3 per pound of chicken and a quantity of 600 million pounds per year. Suppose the Surgeon General issues a report saying that eating chicken is good for your health. The Surgeon General's report will cause consumers to demand chicken at every price. In the short run, firms will respond by Shift the supply curve,...
A supply and demand puzzleThe following graph shows the market for roses in 2007 . Between 2007 and 2008 , the equilibrium quantity of roses remained constant, but the equilibrium price of roses decreased. From this, you can conclude that between 2007 and 2008 , the supply of roses _______ and the demand for roses _______ Adjust the graph to Illustrate your answer by showing the positions of the supply and demand curves in 2008 .Note: Select and drag one or...
The following graph shows the market for cars in 2010. Between 2010 and 2011, the equilibrium quantity of cars remained constant, but the equilibrium price of cars decreased. From this, you can conclude that between 2010 and 2011, the supply of cars increased and the demand for cars decreased . Adjust the graph to illustrate your answer by showing the positions of the supply and demand curves in 2011. Note: Select and drag one or both of the curves to...
7. Using the bond-market diagram below, drag the bond demand or bond supply curves (or both) to illustrate how an increass bond risk affects equilibrium bond price and quantity. Assume that investors are risk-averse Tool tip: Click and drag one or both of back to its original position. just try again and drag it a little farther. When you are satishied with your answer, click the Submit Answer button. the curves. Curves will snap into position, so if you try...
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