Households become concerned about social security

Assignment Help Business Economics

Reference no: EM131009980

Shift the supply or demand for loanable funds functions to reflect the impact of the shock. Indicate whether the real interest rate and the quantity of loanable funds Rises or Falls.

a. Households become concerned about social security and decide to save more of their income.

rate _________________ Loanable Funds ________________

b. The capital stock becomes more productive due to a technological innovation.

rate _________________ Loanable Funds ________________

c. The federal government is trying to decide what to do with the surplus they expect to have this year. They increase spending on schools. (This question is tricky; decide which information is important and which is not.) rate _________________ Loanable Funds ___________

Reference no: EM131009980

Questions Cloud

Output gaps are caused by inflationary pressures : Output gaps are caused by inflationary pressures generated by the unintended side effects of government policy. A low level of aggregate spending can cause real GDP to fall below potential output. When spending is high, output may rise above potentia..

Sensitive assets and fewer rate-sensitive liabilities : Briefly explain whether you agree with the following statements: a. “ A bank that expects interest rates to fall in the future will want to hold more of rate -sensitive assets and fewer rate- sensitive liabilities” True or false b. “A bank that expec..

Shrink the size of the banking system balance sheet : The public cash withdrawals from banks decrease the central bank liabilities and shrink the size of the banking system balance sheet. Do you agree or not? Explain your answer. Use the Fed and the banking balance sheet to support your answer.

Units of each component should be ordered from each supplier : Edwards Manufacturing Company purchases two component parts from three different suppliers. The suppliers have limited capacity, and no one supplier can meet all the company’s needs. In addition, the suppliers charge different prices for the componen..

Households become concerned about social security : Shift the supply or demand for loanable funds functions to reflect the impact of the shock. Indicate whether the real interest rate and the quantity of loanable funds Rises or Falls. Households become concerned about social security and decide to sav..

Brief verbal explanation to comments on governments claim : Suppose the government in a very small country charges tax on some kind of food and has collected tax revenue based on that. Under the pressure of vigorous protest, it declares to return all the tax collected to the buyers and sellers of this food ba..

Affect consumer surplus and producer surplus in both markets : Suppose PlayStations and PlayStation games are complementary goods. Now there is a technological advance in the production of PlayStations. Use a supply/demand diagram of PlayStations market and a supply/demand diagram of PlayStation games market to ..

Money supply not increase by the maximum possible amount : If the required reserve ratio is 10% and $1,000 of new bank reserves are created by the Federal Reserve, what is the maximum potential increase in the quantity of money in the economic system (not just the money created by the banking system but the ..

What price does the monopoly sell its good in each country : A monopoly sells its good in the United States, where the elasticity of demand is -2, and in Japan, where the elasticity of demand is -5. Its marginal cost is $10. At what price does the monopoly sell its good in each country if resale is impossible?

User Account

All Pages