Outside of residential investment and on real interest rate

Assignment Help Business Economics
Reference no: EM131090335

Assume changes in regulation make it easier for households to get mortgages from banks. Seeing this, firms find it more profitable to build more houses, so residential investment increases. What effect do you think this might have on investment outside of residential investment and on the real interest rate? (Hint: treat investment as residential investment + other investment.)

Reference no: EM131090335

Questions Cloud

What is the firm marginal cost : Suppose a firm’s production function is given by Q = L1/2*K1/2. The Marginal Product of Labor and the Marginal Product of Capital are given by: MPL =(K^1/2)/(2L^1/2) , and MPK =(L^1/2)/(2K^1/2). Suppose the price of labor is w = 25, and the price of ..
Aggregate supply and demand with upward sloping sras curve : Why does the SRAS slope upward to the right. What exogenous force determines the overall position of this upward sloping curve on the graph? Show how this decision would affect the SRAS, price level and income level on your graph from the short run i..
Economy has marginal propensity to consume : Your economy has a marginal propensity to consume (MPC) of 0.70. It is currently operating at a level at less than full employment. Prices appear to be sticky in this economy, but by some lucky stroke the rate of interest falls. Using the Keynesian C..
Define strategic competitiveness and above-average returns : Define strategic competitiveness and above-average returns. What is the relationship between strategic competitiveness and returns on investment? Explain why it is important for organizations to analyze and understand the external environment. Descri..
Outside of residential investment and on real interest rate : Assume changes in regulation make it easier for households to get mortgages from banks. Seeing this, firms find it more profitable to build more houses, so residential investment increases. What effect do you think this might have on investment outsi..
Several internal and external assessment methods : Several internal and external assessment methods were discussed within this unit. Identify and discuss three internal assessment methods that you feel are most effective and three that you feel are least effective. Identify and discuss three external..
Pay for such security having principal value : A 5 year treasury note has a coupon rate of 2.50%. What price would you pay for such a security having a principal value (par value) of $1 million if the current interest rate is 2.25%? The current interest rate is 3%? (to simplify the calculations, ..
Which is the most socially desirable : Humphrey and Lauren are splitting 10 gallons of soda and six pounds of popcorn. Let’s represent Humphrey’s preference with the utility function UH = 3SH + PH and Lauren’s preferences with UL = 2SL + 4PL, where SH and SL indicate their soda consumptio..
The concept quantity demanded : The concept "Quantity Demanded":

Reviews

Write a Review

Business Economics Questions & Answers

  How gdp increase if re are labour force participant

If average worker produces $70,000 of GDP, by how much will GDP increase if re are 140 million labour force participants and unemployment rate drops from 5.2 to 4.5 percent.

  The nash equilibrium will be

In a simultaneous move game, if both charge the low price (LP) they each earn $5K. If both charge the high price (HP) they each earn $10K. If they charge different prices, the one playing LP earns $15K and the other earns $1K. The Nash Equilibrium wi..

  What is the profit maximizing level of output

Marginal cost of production is constant and is $10, and there are no fixed costs. What is the profit maximizing level of output? What profit maximizing price will be charged? How much profit will be made if profit is maximized?

  When the crisis hit the world financial system

When the crisis hit the world financial system, XYZ felt the shock inevitably. In any case, XYZ's government couldn't afford to bail out its bank that had gotten so much bigger than its economy. Explain what happened to this country when the world fi..

  Why is aggregate demand curve downward sloping

Why is aggregate demand curve downward sloping? (Interest-rate effect, foreign purchases effect and real-balances effect be able to explain logic behind each of these) What are the determinants (shifters) of AD curve. Be able to determine the equilib..

  Affect aggregate output and the price level

Using aggregate supply and aggregate demand analysis, discuss how the following will two events affect the aggregate level of output and the price level in the economy. Use just a SRAS curve (not the LRAS). You need to determine whether the AD or SRA..

  Monetary base is held outside ?nancial institutions

33 % of monetary base is held outside ?nancial institutions. Where do you think this portion of the monetary base is held exactly? Under what conditions might it return to the banking system?

  Optimal price for monopolist facing different demand curves

The optimal price for a monopolist facing different demand curves in two separate markets will be. People sometimes point to similar gas prices at competing gas stations as evidence of collusion when they could just be selling at market price. if thi..

  Purchase in seven years time if the interest rate

An energy manager expects a need for a boiler that costs $150,000 in about seven years. How much money should the manager save each year to have enough money for the purchase in seven years time if the interest rate is (a) 10% and (b) 3%.

  Demonstrate that inflation is always a monetary phenomenon

Demonstrate that inflation is always a monetary phenomenon in the long-run, and explain why it might not always be a monetary phenomenon in the short-run.

  How gdp is measured through expenditure approach

Who compiles data for the national accounting in US? How GDP is measured through income approach? How GDP is measured through expenditure approach? What are the differences between income and expenditure approaches in measuring GDP?

  Different philosophical approaches to role of government

Describe the scope of Public Finance. Explain different philosophical approaches to the role of the government. Describe the size of the government sector in the U.S.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd