Question 12 1 pts In the loanable funds market, demanders of funds are ____ and suppliers of funds are \circ households and the government if it has a budget deficit; firms and the government if it has a budget surplus \circ firms; households and the government if it has a budget surplus \circ households and the government if it has a budget surplus; firms and the government if it has a budget deficit \circ firms and the government if it has a budget surplus; households and the government if it has a budget deficit \circ households and firms; the government if it has a budget deficit
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Step 1: In the loanable funds market, demanders of funds are those who need funds and suppliers of funds are those who have excess funds. Show more…
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Identify each of the following as involving either demand or supply. Draw a circular flow diagram and label the flows A through F. (Some choices can be on both sides of the goods market.) a. Households in the labor market b. Firms in the goods market c. Firms in the financial market d. Households in the goods market e. Firms in the labor market f. Households in the financial market
The graph below depicts the loanable funds market in the United States. The interest rate is measured in percent, and quantity is measured in billions of dollars. The supply curve, S2, represents the savings by U.S. households. The demand curve, D1, represents investment spending by U.S. firms on capital projects. Consider the graph from Part 1. If the market is in equilibrium, what will happen to the interest rate and the quantity of funds borrowed in the loanable funds market if the U.S. government needs to borrow $80 billion to finance an infrastructure project? The interest rate will (stay the same/ increase/ decrease). The quantity will (stay the same/ increase/ decrease).
Crystal W.
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