If the government reduces transfer payments, what happens to the budget deficit? What curve does this change in the market for loanable funds, which direction does it shift, and what happens to the equilibrium interest rate?
A reduction in transfer payments reduces the government budget deficit. This decrease shifts the supply of loanable funds right which makes the interest rate fall.
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When the Federal Reserve decreases the money supply, it generally does so by purchasing bonds
Indicate whether the statement is true or false
When we compare shares of income earned by U.S. households over the past 40 years, which of the following statements about the distribution of income is true?
A) The percentage of total income represented by each quintile has increased. B) The percentage of total income represented by each quintile has decreased. C) The largest gain in income percentage is in the top 5% of households. D) Lower-income households gained at the expense of higher-income households.
The biggest single factor affecting household income is the householder's age
Indicate whether the statement is true or false
Under a fixed exchange rate system, if the dollar price of a Mexican peso is below its equilibrium level, the peso is said to be
A) depreciable. B) undervalued. C) overvalued. D) appreciable. E) none of the above