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Assume that the loanable funds market for the United States is currently in equilibrium.
a) Draw a correctly labeled graph of the loanable funds market for the United States, and label the equilibrium interest rate as r* and the quantity of funds as QF*.
b) Congress has decided to dramatically cut government spending over the next two years.
i) What will be the impact of the policy action on the government's budget?
ii) On your graph in part (a), show the impact of this policy action on the interest rate and quantity of funds.
c) As a result of the government spending cuts enacted by congress, show the effects of this policy action on a correctly labeled aggregate demand and aggregate supply graph.
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Throughout the ages countries have implemented impediments to trade.
An entrepreneur is deciding whether or not to open up a new gym. He currently makes $50,000 per year as a personal trainer and will have to give up this job if he opens the gym. If he opens the gym, it will cost $100,000 per year in rent and other op..
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For years, you were the owner/operator of a small gift shop in a remote rural area with no competition nearby. As such you were making above average profits every year. Consequently, new competitors were attracted to your market and eventually you fo..
A firm has $3.5 millionin sales, a Lerner index of 0.67, and a marginal cost of $50, and competesagainst 800 other firms in its relevant market.
As we become more aware of our impact on the environment, citizens and legislators are faced with decisions which impact local, state, and national economies. For example, government restrictions on construction due to effects on endangered species o..
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