1) Rio de Janeiro requested federal funding to help pay for public services during the Olympics, at a time when Brazil’s federal government revenue has fallen and created a large deficit. Source: International Business Times, July 15, 2016
Draw a graph of the loanable funds market in Brazil. Suppose that the Brazilian government borrows the required funds in the loanable funds market. How will this borrowing change the real interest rate and the quantity of saving in Brazil? (6 points)
2) The German government’s budget was balanced in 2014 and moved into a surplus of $13 billion in 2015. Helped by higher tax revenues, the budget surplus was twice as high as expected. Source: The Wall Street Journal, January 13, 2016
Explain the effect of Germany’s budget surplus on the loanable funds market in Germany. How will the budget surplus influence economic growth? (6 points)
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1) Rio de Janeiro requested federal funding to help pay for public services during the Olympics,...
1. When it comes to financial matters, the views of Aristotle can be stated as: a. usury is nature’s way of helping each other. b. the fact that money is barren makes it the ideal medium of exchange. c. charging interest is immoral because money is not productive. d. when you lend money, it grows more money. e. interest is too high if it can’t be paid back. 2. Since 2008, when the monetary base was about $800 billion,...