Suppose there was a change in the tax laws to encourage savers to save more and as a result, assume the equilibrium interest rate falls by 2 % point. By how much the equilibrium loanable funds saved and invested would rise or fall?

Q: Refer to the information provided in Table 8.6 below to answer the questions that follow. Table 8.6…

A: As per the given data, when there is fall of interest rate from 15% to 6%, it can be seen that at…

Q: assume elsa has current income of $50000 and expects income of $60000 next period. interest rate is…

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Q: use the analysis for the market of loanble funds to illustrate and explain how the following…

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Q: - Consider an economy described by the following equations: Y = C +1 + G AND, Y = 20,000; G = 4,000;…

A: Given Information : Y= C+I+G Y=20,000 C=1000+0.8(Y-T) I=2500-120r G=4000 T=4000

Q: If new technology makes existing capital obsolete and labour less productive, what are the effects…

A: The real rate of interest is determined by the intersect of demand for loanable fund curve and…

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Q: 14. To use the Net Present Value (NPV) method of capital budgeting, one could calculate the present…

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Q: What are the major economic functions of the interest rate? How might the fact that many businesses…

A: Answer - Major economic functions of the interest rate :- The interest rate has many economic…

Q: Q3. d) Suppose the interest rate rises. Then you will you save more while wor Select one: True False

A: An interest rate is basically determined as the certain value of the principal amount of overall…

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Q: a. Suppose there are two types of investment in the economy: business fixed investment and…

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Q: In Figure 7.23, when the real interest rate is 6 percent, the quantity of loanable funds demanded is…

A: (B)

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A: National saving is the sum of private savings and public savings

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A: In the market of loanable funds, the price is considered to be the rate of interest and money is the…

Q: Bond A pays $8,000 in 20 years. Bond B pays $8,000in 40 years. (To keep things simple, assume that…

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Q: se the following diagram to answer this question he accompanying graph shows the market for loanable…

A: The equilibrium interest rate is determined where the demand and supply of loanable funds are equal.

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A: The economies have various entities, who work together in order to bring economic growth, and…

Q: Assume that Clem is an individual who has current income of $26.898 and expected future income of…

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A: The loanable funds concept is a market interest rate hypothesis in economics. The interest rate is…

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A: The formula is: Price=Annual paymentInterest rate=10000.05=20000 The price is $20000

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A: The supply of lonable funds is inversely related to interest rates.

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A: Loanable funds indicate the availability of an amount that can be loaned out in an economy, at a…

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A: Loanable fund theory: - Loanable fund theory is the theory that determines the interest rate,…

Q: This person earns $1000 of income today and $2000 income next year. Point C represents his…

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Q: Which of the following would1 the Qd of LF? Select one: O A. expected profit decreases. B. the real…

A: The loanable funds concept is a market interest rate hypothesis in economics. The interest rate is…

Q: What is the ratio of the change in savings to the change in income called?    a) MRI  B) APS…

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Q: What is the ratio of savings to disposable income called?    a) MPS  B) cY  NS) APS  D) MRI…

A: When people earn income they will have disposable income after paying taxes and they use it in two…

Q: 29. You purchase a $1,000 face-value bond for $800. The coupon is $100 per year, and inflation is 4…

A: As per given information, Investment Amount  = $ 800 Return                       = $ 100 So, Rate…

Q: Suppose that you eam $250 in year 1 and will eam $448 in year 2. If you borrow mòney against your…

A: Given information: Earning in Year 1 = $250Earning in Year 2 = $448 If money is borrowed against…