In the long run, what happens to consumption, investment, and the interest rate when the government increases taxes in a closed economy? explain
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In the long run, what happens to consumption, investment, and the interest rate
when the government increases taxes in a closed economy? explain
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- In the long run, what happens to consumption, investment, and the interest rate when thegovernment increases taxes in a closed economy?Plase provide an answer detaiing what happens to each if this is done. an answer for consumption, investment and the interest rate. A 3 part answer.On the following graph, show the impact of the increase in government purchases on the interest rate by shifting one or both of the curves. Supply X Demand 2 10 20 30 40 50 QUANTITY OF LOANABLE FUNDS (Billions of dollars) 12 IN TEREST RATE 10 0 0 60 ģ Demand Supply ? Suppose that for each one-percentage-point increase in the interest rate, the level of investment spending declines by $1.25 billion. by According to the change you made to the loanable funds market in the previous scenario, the increase in government purchases causes the interest rate in the money market to from 6% to %. The change in the interest rate causes the level of investment spending to $ billion. by After the multiplier effect is accounted for, the change in investment spending will cause the quantity of output demanded to $ billion at each price level. The impact of an increase in government purchases on the interest rate and the level of investment spending is known as the effect. Place the purple line (diamond…View History Bookmarks Tools Window Help Coy, Jonnifer - Outlo X C Martin County School District X S MyPath - Home Content https://ezto.mheducation.com/ ext/map/index.html?_con%3Dcon&external_browser%3D0&launchUrl=https%25 Saved Level of Output and Income (GDP= DI) Consumption Saving APC APS MPC MPS S480. $-16 520 560 16 60 32 640 48 680 64 720 80 760 96 800 112 Des Instructions: Enter your answer as a whole number. b. What is the break-even level of income in the table? What is the term that economists use for the saving situation shown at the $480 level of income? (Click to select) Y c. For each of the following items, indicate whether the value in the table is either constant or variable as income chanc The MPS: (Click to select) The APC: (Click to select) The MPC: (Click to select) The APS: (Click to select) aw Prev 1 of 1 JAN 11 %24
- Use the following graph to answer the next two questions. 350 300- 250 200 150 100- 50 Real GDP 04 0 An function. 100 in O increase; capital increase; output O advance; technology O increase; depreciation increase; investment 200 300 400 500 Capital 600 would cause an upward shift of the productionShow on a graph of the market for saving and investment the effect of the following. (The graph is a basic savings and investment graph). In an effort to improve fiscal conditions, policymakers raise taxes. This results in lower disposable income. Real interest rate (percent per year) 10. 8 6 4 2 SLF 0 1.2 1.4 1.6 DLF 2.0 2.2 1.8 Loanable funds (trillions of 2009 dollars) The savings function [Select] The investment function [Select] The real interest rate [Select] The level of savings and investment [Select]How would you interpret the graph of an economy? What conditions/gaps are they experiencing?
- Hi I want to ask what will happen to the market of loanable funds and the natural level of output in long run when the government runs a budget surplus? what will the graph of the loanable funds market look like?d. Suppose that society decided to reduce consumption and increase investment. What groups might be hurt? ExplainHow did government purchases and real GDP co-move during and afterthe Great Recession?
- The following graph shows the market for loanable funds in a closed economy. The upward-sloping orange line represents the supply of loanable funds, and the downward-sloping blue line represents the demand for loanable funds. INTEREST RATE (Percent) 10 9 8 50 3 2 1 0 Supply Demand 0 100 200 300 400 500 600 700 800 900 1000 LOANABLE FUNDS (Billions of dollars) ? is the source of the supply of loanable funds. As the interest rate rises, the quantity of loanable funds supplied Suppose the interest rate is 4.5%. Based on the previous graph, the quantity of loanable funds supplied is demanded, resulting in a of loanable funds. This would encourage lenders to the quantity of loanable funds supplied and the equilibrium interest rate of % than the quantity of loans the interest rates they charge, thereby the quantity of loanable funds demanded, moving the market towardExplain THREE (3) factors that can influence investment in an economy.Would you usually expect GDP as measured by what is demanded to be greater than GDP measured by what is supplied, or the reverse?
