50. Which of the following will make crowding out in credit markets more severe? A. A...
50. Which of the following will make crowding out in credit markets more severe? A. A steep investment demand curve B. A global credit market C. Tax increases D. A steep supply curve in the loanable funds market E. None of the above
Homework Answers
Crowding out is the increase in the interest rate when the government expenditure increase. When the investment curve is steep then the interest rate will rise more i.e. there will be more crowding out.
The answer is "A".
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50. Which of the following will make crowding out in credit
markets more severe? A. A...
1)Use a graph of the market for loanable funds to show how the severity of crowding...
1)Use a graph of the market for loanable funds to show how the severity of crowding out depends on the slope of the supply curve. 2)Use a graph of the investment demand curve to demonstrate how the severity of crowding out depends on slope of the firm’s demand for investment goods. 3) In a couple of sentences, explain how expansionary fiscal policy can lead to lower rates of long-term economic growth. Please post an original answer and show in graphs...
Question 10 Many states do have which impose an upper limit on the interest rate that...
Question 10 Many states do have which impose an upper limit on the interest rate that lenders can charge. price ceiling laws usury laws price floor laws minimum interest rate Question 7 Real interest 1.5 20 Loane fund t 25 30 ons of 2009 dolar) The figure above shows the loanable funds market. If the real interest rate is 2 percent, then there will be government intervention in the market to make sure there is no credit crisis. there will...
1. Which of the following is true regarding spending and saving? a. Money that is spent...
1. Which of the following is true regarding spending and saving? a. Money that is spent cannot be saved. b. Spending is good for the economy; saving is bad for the economy. c. Spending money on items that are on sale is the same as saving money. d. Saving money and spending the same dollars has become easier with online banking. 2. If savers were to decrease the level of savings in an economy, what would happen in the loanable...
Which of the following is not true? Banks and other financial intermediaries help make the market...
Which of the following is not true? Banks and other financial intermediaries help make the market for loanable funds fluid O and ease transactions by helping match one person's savings with another person's investment. The market for loanable funds works like any other competitive market with many buyers O and many sellers. The market for loanable funds is comprised of those who want to save the suppliers of funds) and those who want to borrow (the demanders of funds) Where...
According to the Crowding out theory, if the government engages in expansionary fiscal policy, which of...
According to the Crowding out theory, if the government engages in expansionary fiscal policy, which of the following will take place? an increase in the deficit, an increase in demand for loanable funds, an increase in interest rates and a decrease in AD an increase in the deficit, an increase in demand for loanable funds, a decrease in interest rates and a decrease in AD an increase in the deficit, a decrease in demand for loanable funds, a decrease interest...
Question text Suppose that there are three types of markets with different degrees of price elasticity....
Question text Suppose that there are three types of markets with different degrees of price elasticity. In Market 1, the demand curve is perfectly inelastic and the supply curve is relatively steep. In Market 2, the supply curve is relatively flat and the demand curve is relatively steep. In Market 3, the supply curve is relatively steep and the demand curve is relatively flat. Which of the following statements is (are) correct? (x) All of the burden of the tax...
10. The sources of supply and demand for loanable funds Consider the market for loanable funds...
10. The sources of supply and demand for loanable funds Consider the market for loanable funds in the United States. Which of the following are sources of the supply of loanable funds? Check all that apply. A- A household’s current after-tax income exceeds its utility-maximizing level of consumption. B- Government tax revenues exceed government spending. C- A firm’s profit-maximizing level of expenditures exceeds its profits in the current period. D- A government runs a budget deficit. E- A household’s utility-maximizing...
\ **each option is fall or rise // or increase or decrease *** causes the gov...
\
**each option is fall or rise // or increase or decrease
*** causes the gov to run a budget SURPLUS or Deficit
(options)
**** last they want the graph curve shifted to reflect Scenario
3
10. The market for loanable funds and government policy The following graph shows the market for loanable funds. For each of the given scenarios, adjust the appropriate curve on the graph to help you complete the questions that follow. Treat each scenario separately by...
5. The market for loanable funds and government policy The following graph shows the market for...
5. The market for loanable funds and government policy The following graph shows the market for loanable funds. For each of the given scenarios, adjust the appropriate curve on the graph to help you complete the questions that follow. Treat each scenario separately by resetting the graph to its original state before examining the effect of each individual scenario. (Note: You will not be graded on any changes you make to the graph.) Demand - 0 Supply INTEREST RATE (Percent)...
6.For an economy that engages in international trade, GDP is divided into four components. Which of...
6.For an economy that engages in international trade, GDP is divided into four components. Which of the following items is not one of those components? a. Consumption. b. Taxes. c. Government purchases. d. Net exports. 7. The slope of the demand for loanable funds curve represents the a. positive relation between the real interest rate and investment. b. negative relation between the real interest rate and investment c. positive relation between the real interest rate and saving d. negative relation...
Question 10 Many states do have which impose an upper limit on the interest rate that lenders can charge. price ceiling laws usury laws price floor laws minimum interest rate Question 7 Real interest 1.5 20 Loane fund t 25 30 ons of 2009 dolar) The figure above shows the loanable funds market. If the real interest rate is 2 percent, then there will be government intervention in the market to make sure there is no credit crisis. there will...
Which of the following is not true? Banks and other financial intermediaries help make the market for loanable funds fluid O and ease transactions by helping match one person's savings with another person's investment. The market for loanable funds works like any other competitive market with many buyers O and many sellers. The market for loanable funds is comprised of those who want to save the suppliers of funds) and those who want to borrow (the demanders of funds) Where...
According to the Crowding out theory, if the government engages in expansionary fiscal policy, which of the following will take place? an increase in the deficit, an increase in demand for loanable funds, an increase in interest rates and a decrease in AD an increase in the deficit, an increase in demand for loanable funds, a decrease in interest rates and a decrease in AD an increase in the deficit, a decrease in demand for loanable funds, a decrease interest...
\
**each option is fall or rise // or increase or decrease
*** causes the gov to run a budget SURPLUS or Deficit
(options)
**** last they want the graph curve shifted to reflect Scenario
3
10. The market for loanable funds and government policy The following graph shows the market for loanable funds. For each of the given scenarios, adjust the appropriate curve on the graph to help you complete the questions that follow. Treat each scenario separately by...
5. The market for loanable funds and government policy The following graph shows the market for loanable funds. For each of the given scenarios, adjust the appropriate curve on the graph to help you complete the questions that follow. Treat each scenario separately by resetting the graph to its original state before examining the effect of each individual scenario. (Note: You will not be graded on any changes you make to the graph.) Demand - 0 Supply INTEREST RATE (Percent)...
6.For an economy that engages in international trade, GDP is divided into four components. Which of the following items is not one of those components? a. Consumption. b. Taxes. c. Government purchases. d. Net exports. 7. The slope of the demand for loanable funds curve represents the a. positive relation between the real interest rate and investment. b. negative relation between the real interest rate and investment c. positive relation between the real interest rate and saving d. negative relation...
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