Draw a graph and explain what happens to the real interest rate in the United States...
Draw a graph and explain what happens to the real interest rate in the United States by using a loanable funds model, everything else held constant. A new wave of computer technology in the United States has been shown to greatly increase worker productivity.
Homework Answers
Rise in productivity causes rise in income and output. So it drives up demand for money in economy. Demand for money will shift to right thereby pushing up real interest rate in market.
Following is diagram:
In above diagram, rise in income pushes up demand for money to right MD1 and new real interest rate is established at upper point,
Thus, real interest rate will rise if there is increase in productivity.
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Draw a graph and explain what happens to the real interest rate
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Many interest rates in the United States recently fell. Which
of the following factors could not have been the cause?
Question 12 (Mandatory) (1 point) Many interest rates in the United States recently fell. Which of the following factors could not have been the cause? increase in the demand for loanable funds decrease in the demand for loanable funds increase in the supply of loanable funds
Please just draw the graphs. No need to explain/write out the
rest. Thanks!
1. Assume that national savings in the United States increases. Using a correctly labeled loanable funds graph and production possibilities curve, show and explain the impact of the increase in each of the following. savings on L interest rates Long-term economic growth for goods an economy producing capital and consumer 11. b. If the interest rates in the rest of the world remain unchanged, explain the impact...
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4. The United States invaded Afghanistan on October 7th 2001 and Iraq on March 30th 2003. Taking these wars as a single event, show what effect the increase in governments spending for the war should have on the AS-AD model. What happens to prices, output and unemployment? a. This question obviously requires a graph and a written explanation. You need several clearly labeled graphs to answer this question. i. ii. You also need to explain what is happening in the...
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