Author Question: The supply of loanable funds curve has a ________ slope and the demand for loanable funds curve has ... (Read 175 times)

fox · **on:** Jun 29, 2018

The supply of loanable funds curve has a ________ slope and the demand for loanable funds curve has a ________ slope.

A) negative; positive
B) positive; negative
C) negative; negative
D) positive; positive
E) vertical; horizontal

Question 2

Explain what happens to equilibrium expenditure if autonomous expenditure increases by 100 million.

What will be an ideal response?

ktidd · **Reply #1 on:** Jun 29, 2018

Answer to Question 1

B

Answer to Question 2

Equilibrium expenditure will increase by more than 100 million because of the multiplier. Basically, the 100 million increase in spending will induce further increases in aggregate expenditure because the initial increase in expenditure increases income, which, in turn, causes further increases in expenditure and income.