Did the rescue plan crowd out private investment

Assignment Help International Economics
Reference no: EM13224142

Did the rescue plan crowd out private investment?

In mid-2007, on the eve of the onset of the global financial crisis, U.S. investment expenditure was running at $2.2 trillion. The government had a budget deficit of $0.2 trillion, so the quantity of loanable funds demanded and supplied was $2.4 trillion. The real interest rate at the time was 3% per year.

By mid-2009, U.S. investment expenditure had fallen to $1.5 trillion and the real interest rate had risen to 4.5% per year.

What caused the collapse of investment and the rise in the real interest rate?

Reference no: EM13224142

Questions Cloud

Is telecommunication is elastic or inelastic : Is telecommunication is elastic or inelastic
Discuss the role of the food and drug administration : Discuss the role of the Food and Drug Administration in the United States. Explain the regulatory authority given to the administration, and the role it plays in monitoring the safety of food and drugs.
Compute the equilibrium concentration of hc2o4 : Calculate the equilibrium concentration of HC2O4- in a 0.20 M solution of oxalic acid.
Explain the differences between a regionalized model of care : Explain the differences between a regionalized model of care and the dispersed model of care. I
Did the rescue plan crowd out private investment : In mid-2007, on the eve of the onset of the global financial crisis, U.S. investment expenditure was running at $2.2 trillion. The government had a budget deficit of $0.2 trillion, so the quantity of loanable funds demanded and supplied was $2.4 t..
How many grams of kh2bo3 should be added to the solution? : You have 4.507 L of a 0.1572 M H3BO3 (boric acid, Ka = 5.800x10-10) solution. To convert this into a buffer having a pH of 9.3380, how many grams of KH2BO3 (M.W. 99.926) should be added to the solution?
What are some of the factors which could affect the dynamics : What are some of the factors which could affect the dynamics of the relationship between client and practitioner?
Note and installment note with unrealistic interest rate : Note and installment note with unrealistic interest rate
How might entering into an od relationship differ : How might entering into an OD relationship differ for an internal OD practitioner compared to an external OD practitioner?

Reviews

Write a Review

International Economics Questions & Answers

  Key features of an oligopolistic industry

Discuss and explain the key features of an oligopolistic industry. Illustrate your answer with reference to an industry of your selection.

  Multiple choice questions on exchange rate

Smith is a currency trader and reviewing forward foreign exchange rates. His investors have made several statements regarding foreign exchange rates.

  What is burger kings core competency

What is Burger King's core competency? How does it relate to its chosen strategy and how would you explain how Burger King has decided to configure and coordinate its value chain? Which of Burger King's value chain activities create the most value ..

  Explain why vending machines are so prevalent in tokyo

Tokyo's streets are characterized by a plethora of vending machines-dispensing everything from soft drinks, candy bars, and cigarettes to magazines, personal toiletries and beer. Unlike other major cities such as New York and London.

  Investigations of antitrust behavior

The Microsoft trial has been one of biggest investigations of antitrust behavior since turn of the century. Supporting the governments side research and present a cohesive argument to the other side.

  Determine market structure for commercial aircrafts

Based on your reading, which market structure is more applicable for the market for building commercial aircrafts, when there are two major manufacturers of the commercial airplanes and little possibility of entry by new firms:

  Calculating effective rate of protection

Assume that the country A has only three categories of traded goods and that A's imports and exports of the three goods are as follows:

  Postmerger herfindahl hirschman index

Assume Fiat recently entered into an Agreement and Plan of Merger with Case for $4.3 billion. Prior to the merger, market for four wheel drive tractors consisted of 5-company's.

  How much will australia trip cost you in us dollars

You are planning a trip to Australia. Your hotel will cost you A$145 per night for seven nights. You expect to spend another A$2,800 for meals, tours, souvenirs, and so forth. How much will this trip cost you in US dollars given the following exch..

  Which factor would be most influential for decision-making

Evaluate the relationship between the European Euro crisis in 2012 and the American economy. Assess how this affects American businesses and decisions made by mangers related to sustainable profitability. Provide examples with your response.

  Institutions of the bretton woods system

Critically evaluate the rules and institutions of the Bretton Woods system. What lessons do these features provide for Economic and Monetary Union policymakers?

  How chile and argentina can both gain from trade

The following table shows the hourly output per worker in two industries in Chile and Argentina: Hats Beer Chile    8    6 Argentina 1 2 A) suppose that Chile and Argentina currently do not trade with each other. Each has 1,000 hours of labor to us..

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