ilable to businesses that make specific investments in Atlantic region and the Gaspe Peninsula. The graph Ows the market for loanable funds. ow the impact of this tax credit by moving the proper rve appropriately in the graph. he new equilibrium interest rate is The quantity of loanable funds is $ 1 Incorrect 5 Incorrect I billion Which statement accurately describes the impact of the Atlantic Investment Tax Credit? Firms find that more investments are profitable and increase their demand for loanable funds. As a result, the interest rate rises. Interest rate (%) 10 0 5 10 15 20 25 30 35 Quantity of loanable funds (in billions) 40 Supply 45 Demand 50

ilable to businesses that make specific investments in Atlantic region and the Gaspe Peninsula. The graph Ows the market for loanable funds. ow the impact of this tax credit by moving the proper rve appropriately in the graph. he new equilibrium interest rate is The quantity of loanable funds is $ 1 Incorrect 5 Incorrect I billion Which statement accurately describes the impact of the Atlantic Investment Tax Credit? Firms find that more investments are profitable and increase their demand for loanable funds. As a result, the interest rate rises. Interest rate (%) 10 0 5 10 15 20 25 30 35 Quantity of loanable funds (in billions) 40 Supply 45 Demand 50

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter21: Financial Markets, Saving, And Investment

Section: Chapter Questions

Problem 9P

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Similar questions

The Atlantic Investment Tax Credit is a 10% tax credit available to businesses that make specific investments in the Atlantic region and the Gaspe Peninsula. The graph shows the market for loanable funds. Show the impact of this tax credit by moving the proper curve appropriately in the graph. The new equilibrium interest rate is The quantity of loanable funds is $ ક billion Which statement accurately describes the impact of the Atlantic Investment Tax Credit? Interest rate (%) 10 9 8 7 6 5 st 3 2 1 0 0 5 10 15 20 25 30 35 Quantity of loanable funds (in billions) 40 Supply Demand 45 50
Interest 6% lonable fund is 4trillion. 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?
Refer to the figure below to answer the following questions. Real interest rate (percent per year) CON 6 5 4 3 2 1 0 H H Select one: DLF₂ DLFO 0.5 1.0 1.5 2.0 Loanable funds (trillions of 2002 dollars) DLF₁ Refer to Figure 23.2.2. In Figure 23.2.2, a decrease the real interest rate will result in a movement from point E to A. point F. B. point G. C. point H. D. point. O E. either point G or point F. Figure 23.2.2
Refer to the figure below to answer the following questions. Real interest rate (percent per year) 10 DLF 150 300 450 600 750 900 Loanoble funds (billions of 2007 dollars) Figure 7.2.3 In Figure 7.23, when the real interest rate is 6 percent, the quantity of loanable funds demanded is Select one: O A $150 billion. O B. $450 billion. O C $600 billion. O D. $300 billion. O E. any amount less than $450 billion.
Use the analysis for the market for loanable funds diagram to illustrate and explain how thefollowing government policy affect the economy’s saving and investment. Policy 1: Suppose thegovernment changes the tax code, allowing individuals to reduce their taxable income if they savemoney in registered retirement savings plans (RRSPs). Your response should answer the following questions:a. State and explain which loanable funds curve would this policy affect? b. Which way would the loanable funds curve shift? c. What would be the impact on interest rates? Draw the loanable funds diagram to illustrate your answers for a to c.
HOw wil his change the Scenario 2: The government increases deficit spending by $100 Billion dollars to invest in green energy throughout the country. 1.What effect will this have on the demand for loanable funds? 2. What effect will this change have on the interest rate? 3. How will this change the behavior of consumers? Scenario 3: Unemplovment decreases throughoutthe country causing a dramaticincrease in
Suppose that the demand for loanable funds for car loans in the Milwaukee area is $12 million per month at an interest rate of 1O percent per year, $13 million at an interest rate of 9 percent per year, $14 million at an interest rate of 8 percent per year, and so on. If the supply of loanable funds is fixed at $18 million, what will be the equilibrium interest rate? Instructions: Enter your answer as a whole number. percent per year
This figure shows the loanable funds market for a closed economy. INTEREST RATE (Percent) 09 2 E с 50 100 150 LOANABLE FUNDS (Dollars) D₂ o Refer to Figure 26-4. Starting at point A, the enactment of an investment tax credit would likely cause the quantity of loanable funds traded to increase to $150 and the interest rate to rise to 6% (point C). decrease to $50 and the interest rate to fall to 2% (point B). decrease to $50 and the interest rate to rise to 6% (point E). increase to $150 and the interest rate to fall to 2% (point D).
Use the analysis for the market for loanable funds diagram to illustrate and explain how thefollowing government policy affect the economy’s saving and investment. Policy 1: Suppose the government changes the tax code, allowing individuals to reduce their taxable income if they save money in registered retirement savings plans (RRSPs). Your response should answer the following questions: a. State and explain which loanable funds curve would this policy affect? b. Which way would the loanable funds curve shift? c. What would be the impact on interest rates? Draw the loanable funds diagram to illustrate your answers for a to c.
Figure 32-1 REAL INTEREST RATE (Percent) 8 7 50 5 4 3 N Demand Supply 10 20 30 40 50 60 70 80 QUANTITY OF LOANABLE FUNDS (Billions of dollars) Refer to Figure 32-1. If the real interest rate is 7 percent, the quantity of loanable funds demanded is O $70 billion, and the quantity supplied is $10 billion. $10 billion, and the quantity supplied is $70 billion. O $10 billion, and the quantity supplied is $10 billion. O $70 billion, and the quantity supplied is $10 billion.
Question 31 Figure 26-1 The figure depicts a demand-for-loanable-funds curve and two supply-of-loanable-funds curves. S₁ Demand Refer to Figure 26-1. Which of the following events would shift the supply curve from S₁ to S2? O a. In response to tax reform, firms are encouraged to invest more than they previously invested. O b. In response to tax reform, households are encouraged to save more than they previously saved. c. Government goes from running a balanced budget to running a budget deficit. O d. Any of the above events would shift the supply curve from S₁ to S2.
Anna has an income of $1000 this year, and she expects an income of $2500next year. She can borrow and lend money at an interest rate of 10%.Consumption goods cost $1 per unit this year and there is no inflation. What is the net present value of Anna’s endowment?