Explain and show graphically how a decrease in household saving affects the equilibrium interest rate and the equilibrium quantity of loanable funds
What will be an ideal response?
A decrease in household saving decreases the supply of loanable funds, shifting the supply curve for loanable funds to the left, as shown below. The decrease in the supply of loanable funds results in an increase in the equilibrium interest rate and a decrease in the equilibrium quantity of loanable funds.
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Every transaction concerning the exportation of goods from the United States constitutes a
A) supply of foreign currency with no effect on the market for the dollar. B) demand for dollars with no effect on markets for foreign currencies. C) supply of foreign currencies and a demand for dollars. D) demand for foreign currencies and a supply of dollars.
In 1995, the United States threatened to impose 100 percent tariffs on ________ from ________ if it didn't loosen its protectionist policies.
A. luxury cars; Japan B. auto parts; Japan C. brandies; France D. light trucks; Germany
Answer the following questions true (T) or false (F)
1. Dumping refers to countries exporting unwanted and inferior products to other countries. 2. Holding all else constant, a rise in interest rates in the United States will cause the dollar to appreciate in international exchange markets. 3. Holding all else constant, an economic expansion in Mexico should decrease the demand for U.S. dollars.
The benefit to employers of deferred payments is that
A) adverse selection is eliminated. B) employers cannot engage in any opportunistic behavior. C) these payments raise the cost of being fired, so more monitoring is needed. D) these payments raise the cost of being fired, so less monitoring is needed.