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Author Question: Ignoring the Ricardo-Barro effect, what impact does the government have in the loanable funds ... (Read 38 times)

justinmsk

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on: Jun 29, 2018
Ignoring the Ricardo-Barro effect, what impact does the government have in the loanable funds market?
 
  What will be an ideal response?

Question 2

An objective analysis of what is in the economy is referred to as
 
  A) positive economics.
  B) normative economics.
  C) command economics.
  D) implicit economics.


vickybb89

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Reply #1 on: Jun 29, 2018
Answer to Question 1

The government has two effects in the market for loanable funds. First, if the government has a budget surplus, it adds to private saving and increases the supply of loanable funds. Second, if a government has a budget deficit, it increases the demand for loanable funds.

Answer to Question 2

A


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