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Author Question: How does each of the following shift the supply of loanable funds and the demand for loanable funds ... (Read 122 times)

dejastew

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on: Jun 29, 2018
How does each of the following shift the supply of loanable funds and the demand for loanable funds curves? What is the effect of each on the equilibrium real interest rate and equilibrium quantity of loanable funds?
 
  a. Households' disposable incomes increase
  b. An increase in expected profit

Question 2

Surplus value that is lost because something is keeping the market from functioning as well as it can is known as ________.
 
  Fill in the blank(s) with correct word


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catron30

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

a. Saving increases and the supply of loanable funds curve shifts rightward. The real interest rate falls and the quantity of loanable funds increases.
b. Investment demand increases and the demand for loanable funds curve shifts rightward. The real interest rate rises and the quantity of loanable funds increases.

Answer to Question 2

deadweight loss


dejastew

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Reply 2 on: Jun 29, 2018
Gracias!

kalskdjl1212

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Reply 3 on: Yesterday
Great answer, keep it coming :)

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