Economy''s supply and demand

Assignment Help Business Economics
Reference no: EM137180

As government subsidizes investment, likely with an investment tax credit, the subsidy often applies to only various types of investment. As this question consider the cause of such type of change. Suppose there are two types of investment in the economy: business investment and residential investment. And suppose that the government institutes an investment tax credit only for business investment.

a. Explain how does the policy involve the demand curve for business investment? Also explicate the demand curve for residential investment?

b. Sketch the economy's supply and demand for loan able funds. How does this policy involve the supply and demand for loan able funds? What occurs to the equilibrium interest rate?

c. Compare the old and new equilibrium. How does the policy affect the total quantity of investment? Explain the quantity of business investment? Explain the quantity of residential investment?

Reference no: EM137180

Questions Cloud

Marketplace for tobacco : Assume there is a drought that destroys a large portion of the tobacco crop. Explain what happen in the marketplace for tobacco.
What probable difference between these forms : Glucose (C6H12O6) can survive as both an open-chain form and a closed-ring form. Before 1900, glucose was only thought to happen as an open chain. Now we know that over 99 percent of the time, glucose occurs in the closed-ring form. What probable dif..
Accumulated principal plus interest : Illustrate how much will they have accumulated principal plus interest when they reach 65 years old. What is the moral of this situation.
Significant to use price index : Elucidate how do the GDP per capitals change after accounting for price indices.
Economy''s supply and demand : How does this policy involve the supply and demand for loan able funds. What occurs to the equilibrium interest rate.
Explain especially what happens to dcpip and why : Explain especially what happens to DCPIP and why and how. Explain results and purposes of each of the four tubes of solutions where the photosynthetic output of the Hill reaction was measured.
What are the chances of a chestnut, pacer foal : In horses, black coat colour is dominant over chestnut. In gait, trotting is dominant over pacing. If a mare with a genotype of bbTt is bred to a stallion with a genotype of BbTt, what are the chances of a chestnut, pacer foal.
Advantages and disadvantages of design dominance : When design dominance is discussed, what company name comes to mind.
Macro islands increased investment : Illustrate the expected total monetary loss under 4% of annual interest rate if this park is permanently closed this year.

Reviews

Write a Review

Business Economics Questions & Answers

  Uniform annual revenue

How much is the uniform annual revenue in years 2 through 5 to achieve economic equivalence if the company decides to use MARR.

  Listing different orderings and coalitions

Listing different orderings and coalitions is not going to work for this problem because there are too many possibilities, excluding you can use different tools which we have discussed in class.

  Demand curve is much more inelastic

If the demand curve is much more inelastic than the supply curve, clarify whether buyers or sellers will shoulder more of the tax burden from a new tax placed on the sellers.

  Amount of income tax and the average tax rate

A flat tax plan allows individuals to deduct a standard allowance of $10,000 from their wages. Assume that the flat tax rate is 12%. Calculate the amount of income tax and the average tax rate if you were earning.

  Firms raise capital from investors

Firms raise capital from investors by issuing shares in the primary markets

  Estimated regression equation

Estimated regression equation for which quantifies the demand for Widget

  Securities in the market

Shadow Bank 411 buys $3 million more securities in the market and "pays" for them with its account at Bank 411. Bank 411 borrows $3 million more as a first response.

  Essential distinctions among the stages of growth theory

Explain the essential distinctions among the stages-of-growth theory of development, the Structural change models of Lewis and Chenery.

  Immigration between two countries

The government wants to stimulate the economy. By how much will aggregate demand at current prices shift initially before multiplier effects.

  Sustainable development is always considered

Steps that a government take to ensure that sustainable development is always considered in assessing which major economic projects or investment proposals to accept

  How could we modify the system to eliminate

Suppose she is offered a new job that would pay her $15,000 and would bring her earnings high enough so that she no longer qualified for any welfare benefits.

  Major rating agencies

Given your understanding of bond markets, what signals is the the bond market sending in response to the downgrade. Is this problematic.

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