The table sets out the data for an economy when the government's budget is balanced. Real interest rate Loanable funds demanded Loanable funds supplied (billions of 2012 dollars) (percent per year) 4 5 6 7 8 9 10 6.5 6.0 5.5 5.0 4.5 4.0 3.5 4.5 5.0 5.5 6.0 6.5 7.0 7.5
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- Given demand and supply for loanable fund Market at given time period in the table below Quantity of loanable fund demanded (billion $) Real Quantity of loanable fund supplied (billion $) interest rate 0.5 400 120 0.75 380 140 1 360 160 180 1.25 340 1.5 320 20 1.75 300 220 280 240 2.25 260 260 2.5 240 280 2.75 220 300 3 200 320 3.25 180 340 3.5 160 360 3.75 140 380 4 120 400 Instructions: 1. Using excel, find the equilibrium real interest rate and quantity of loanable fund, show the point on the graph. 2. If this country experiences an expansion business cycle phase that increases the demand for loanab fund by $40 billion. a) Find the new equilibrium real interest rate and quantity of loanable fund. b) Show the shift on the graph. 3. Starting from the original equilibrium If there is a decreases in aggregate income that decreases supply for loanable fund by $20 billion. a) Find the new equilibrium real interest rate and quantity of loanable fund. b) Show the shift on the graph. (An increase in interest rate would lead to a _____ it's supply of loanable funds a. No effect b. None c. Increase d. Decrease #### Correct answer //////QUESTION 1 Muhammad takes out a loan of $ 4,324, at 8% simple interest, for 9 years. How much will he pay back at the end of year 9? QUESTION 2 Calculate the amount of interest on an investment of AED 149,956 at 8% simple interest for 7 years.
- If the supply of loanable funds decreases and the demand for loanable funds increases at the same time, interest rates will: a) increase, decrease, or remain the same. Ob) increase. c) remain the same. d) decrease. Note:- Please avoid using ChatGPT and refrain from providing handwritten solutions; otherwise, I will definitely give a downvote. Also, be mindful of plagiarism. Answer completely and accurate answer. Rest assured, you will receive an upvote if the answer is accurate.Question 5 Use the analysis for the market for loanable funds diagram to illustrate and explain how the following 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.17. What makes up the supply curve in the loanable funds market? Why does this curve have a positive relationship with the real interest rate?
- The table given below shows an economy's demand for loanable funds and supply of loanable funds schedules when the government's budget is balanced. Real Interest rate (% per year) Loanable fund demanded Loanable fund supplied (Trillian of 2002 $) (Trillian of 2002 $) 8.5 5.5 8.0 6.0 75 6.5 7.0 7.0 6.5 7.0 9. 6.0 8.0 10 5.5 8.5 a. If the government has a budget surplus of $1 trillion, what are the real interest rate, the quantity of investment, and the quantity of private saving? Is there any crowding out in this situation? b. If the government has a budget deficit of $1 trillion, what are the real interest rate, the quantity of investment, and the quantity of private saving? is there any crowding out in this situation? c. If the government has a budget deficit of $1 trillion and the Ricardo-Barro effect occurs, what are the real interest rate and the quantity of investment?The table below shows Demand and Supply for loanable fund at given time. Real interest rate Quantity of loanable fund demanded (billion $) Quantity of loanable fund supplied (billion $) 0.01 1000 400 0.02 950 450 0.03 900 500 0.04 850 550 0.05 800 600 0.06 750 650 0.07 700 700 0.08 650 750 0.09 600 800 0.10 550 850 0.11 500 900 0.12 450 950 0.13 400 1000 0.14 350 1050 0.15 300 1100 Instructions: Using excel, find the equilibrium real interest rate and quantity of loanable fund. show the equilibrium on a graph. If this country experiences a recession business cycle phase that decreases the demand for loanable fund by $200 billion. Find the new equilibrium real interest rate and quantity of loanable fund. Show the shift on the graph. list Two factors that shift SLF rightward and two factors that shift DLF rightward What is the meaning of crowding out?…The table sets out the data for an economy when the government's budget is balanced. K The quantity of loanable funds demanded increases by $0.5 billion at each real interest rate and the quantity of loanable funds supplied increases by $1.5 billion at each interest rate. If, at the same time the government budget becomes a deficit of $2.0 billion, what are the real interest rate and investment? Does any crowding out occur? >>> Answer to 1 decimal place. The real interest rate is percent a year.
- In the era of Covid-19 pandemic, producers were pessimistic about the returns of capital and decide to reduce their investments, use a well-labelled diagram of loanable funds market to illustrate and explain the impacts on the equilibrium interest rate and quantity of loanable funds?Suppose that you earn $320 in year 1 and will ean $720 in year 2. If you borrow money against your future income you will have and additional $576 to spend in year 1, and if you lend all of your current income you will have and additional $400 to spend in year 2. In both years you consume only food which costs $1 per kilogram in each year. What is the interest rate that you borrow and lend at? R= Let your MRS for food in year 1 with food in year 2 be given by the formula where F is the amount of food consumed this year and F is the amount of food consumed next year. Calculate your consumption bundle: F = F = Suppose the interest rate at which you can borrow and lend changes to 20%. Calculate your new consumption bundle: F = F2 = Which interest rate is preferred? The initial interest rate found in part 1 O The new interest rate, 20%What is the effect of an increase in the tax rate on interest income on the supply of and the demand of loanable funds Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.