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- The prices of both soft and hard commodities are very volatile. Explain why?Explain what happens to Pe and Qe when supply increases and when supply falls.Predict how each of the following economic changes will affect the equilibrium price and quantity in the financial market for home loans. Sketch a demand and supply diagram to support your answer. Banks that have made home loans find that a larger number of people than they expected are not repaying those loans.
- If a bank expects inflation to increase in the near future, how will it respond? It will start paying less interest on deposits. It will seek to reduce the amount of cash held in its vaults. It will temporarily scale back its efforts to gain new customers. It will start charging more interest on loans. It will temporarily suspend withdrawals.Explain why demand policies can only reduce unemployment below the natural rate in the short-run.Predict how each of the following economic changes will affect the equilibrium price and quantity in the financial market for home loans. Sketch a demand and supply diagram to support your answers. The number of people at the most common ages for home-buying increases. People gain confidence that the economy is growing and that their jobs are secure. Banks that have made home loans find that a larger number of people than they expected are not repaying those loans.
- Inflation is an economic problem because it leads inevitably to unemployment. O leads to recession. makes prices less useful as signals for resource allocation. results in rapid increases in the money supply.Sometimes price cuts can have an unintended result of consumers waiting for deeper discounts. What does this waiting suggest about supply and demand?What happened to the Pe and Qe if the market supply increase by 5% at all price levels without any increase in deman?
- True/False Market price is an macroeconomic concept.Predict how each of the following economic changes will affect the equilibrium price and quantity in the financial market for home loans. Sketch a demand and supply diagram to support your answers. The number of people at the most common ages for home-buying increases. People gain confidence that the economy is growing and that their jobs are secure. Banks that have made home loans find that a larger number of people than they expected are not repaying those loans. Because of a threat of a war, people become uncertain about their economic future The overall level of saving in the economy diminishes. The federal government changes its bank regulations in a way that makes it cheaper and easier for banks to make home loans.the demand‐pull inflation