+1-415-670-9189
info@expertsmind.com
Outward shift in the demand for capital occurs
Course:- Business Economics
Reference No.:- EM13795719




Assignment Help
Expertsmind Rated 4.9 / 5 based on 47215 reviews.
Review Site
Assignment Help >> Business Economics

Which of these four scenarios are most important today? Your answer may include more than one scenario.

Four Scenarios are:

1) Outward Shift in the demand for capital occurs in an economic boom when increased construction of plants, buildings and other capital-intensive business activities requires huge outlays of investment. In this scenario, interest rates tend to rise along with capital invested.

2) Decreased shift in the demand for capital ocurs in an economic downturn or recession. The economy stops growing, the real estate market collapses, and new building permits drop. The result? Lower interest rates and less capital invested.

3) Outward shift in supply of capital occurs in situations where new sources of capital enter the market, either from a domestic savings (people desire to save more) or foreign investment sources. The greater the supply of capital requires banks and other intermediaries to reduce the interest rates and encourage more borrowing. Net result: Lower interest rates and more capital invested.

 

4) Inward shift in the supply of capital occurs when people decide to cut back on their savings or foreigners withdraw investment capital. With fewer loan-able funds available, banks and other financial institutions must ration the funds, causing interest rates to climb and fewer investments projects. Net result: Higher interest rates, less capital invested.




Put your comment
 
Minimize


Ask Question & Get Answers from Experts
Browse some more (Business Economics) Materials
Jim sees commuting by bus and T as perfect substitutes (U = T + B), that is, he would exchange one commute by bus for one commute by T. The price of a bus ticket is $1.50 and
Suppose that the government is deciding how wide to make a public road that services one resident named Bob. Bob’s willingness to pay for each meter of road is described by 20
House of Cards (a) Frank Underwood and Raymond Tusk need to negotiate the terms of a potential alliance. You are told the following: (i) Both of them need to decide whether or
Suppose that the labor force participate rate is 79%, the total working-age population is 100 million, and the number of unemployed is 2.5 million. Determine: (i) the labor fo
The graph to the right shows a situation in which the economy was in equilibrium at potential GDP (at point A) when the demand for housing sharply declined. What actions can C
In the lectures videos, we identified three tasks any collusive arrangement or cartel would need to accomplish if they were going to be successful in raising price above the c
What factors surrounding behavioral health create special challenges and special considerations for managed care programs? How is managed behavioral healthcare different from
Brainstorm the issues and list some pros and cons of offering financial incentives for donating human organs. Then take a side in the debate and write a short paragraph or two