1. If an economy has a budget surplus of 400, private savings of 1,200, and investment...
1. If an economy has a budget surplus of 400, private savings of 1,200, and investment of 1,600, what will the balance of trade in this economy equal?
2. If there is shortage of loanable funds, then what happens to the supply and demand for loanable funds?
3.Changing the level of government spending is an example of what kind of policy?
4.If inflation is expected, then the short-run aggregate supply curve is shaped how?
Homework Answers
1. Balance of trade = Investment - (Budget surplus + Private savings)
= $(1600- (400+1200)) = $0 , there is neither is deficit nor surplus.
2. If there is shortage of loanable funds , then neither curve shifts ,but the quantity of loanable funds supplied increases and the quantity of loanable funds demanded decreases as the interest rate rises to equilibrium .
3. Changing the level of government spending is an example of fiscal policy.
4. If inflation is expected ,then the short run aggregate supply curve is upward sloping.
Add Answer to:
1. If an economy has a budget surplus of 400, private
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