Macroeconomics
21st Edition
ISBN: 9781259915673
Author: Campbell R. McConnell, Stanley L. Brue, Sean Masaki Flynn Dr.
Publisher: McGraw-Hill Education
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Question
Chapter 10.5, Problem 3QQ
To determine
Investment demand curve.
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Students have asked these similar questions
If business taxes are reduced and the real interest rate increases: *
A. consumption and saving will necessarily increase.
B. the level of investment spending might either increase or decrease.
C. the level of investment spending will necessarily increase
D. the level of investment spending will necessarily decrease
If disposable personal income is $400 billion and personal saving is $8 billion, the
personal saving rate is
Select one:
a. 12%.
b. 5%.
C. 1.5%.
d. 2%.
The above schedule indicates that if the real interest rate is 6 percent, then:
Select one:
a. $25 billion of investment will be undertaken.
b. we cannot tell what volume of investment will be profitable.
c. $40 billion of investment will be undertaken
d. $30 billion will be both saved and invested.
Chapter 10 Solutions
Macroeconomics
Ch. 10.2 - Prob. 1QQCh. 10.2 - Prob. 2QQCh. 10.2 - Prob. 3QQCh. 10.2 - Prob. 4QQCh. 10.5 - Prob. 1QQCh. 10.5 - Prob. 2QQCh. 10.5 - Prob. 3QQCh. 10.5 - Prob. 4QQCh. 10 - Prob. 1DQCh. 10 - Prob. 2DQ
Ch. 10 - Prob. 3DQCh. 10 - Prob. 4DQCh. 10 - Prob. 5DQCh. 10 - Prob. 6DQCh. 10 - Prob. 7DQCh. 10 - Prob. 8DQCh. 10 - Prob. 9DQCh. 10 - Prob. 1RQCh. 10 - Prob. 2RQCh. 10 - Prob. 3RQCh. 10 - Prob. 4RQCh. 10 - Prob. 5RQCh. 10 - Prob. 6RQCh. 10 - Prob. 7RQCh. 10 - Prob. 8RQCh. 10 - Prob. 9RQCh. 10 - Prob. 1PCh. 10 - Prob. 2PCh. 10 - Prob. 3PCh. 10 - Prob. 4PCh. 10 - Prob. 5PCh. 10 - Prob. 6PCh. 10 - Prob. 7PCh. 10 - Prob. 8PCh. 10 - Prob. 9PCh. 10 - Prob. 10P
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Similar questions
- 1. Explain the difference between public & private saving. 2. Compare & contrast stocks & bonds. 3. Graph the market for loanable funds such that current national saving is at a level of $500 million and the real interest rate is at 2.5%arrow_forwardA rightward shift of the investment demand curve would be caused by a(an) a. increase in the expected rate of return on investment caused by an increase inbusiness confidence.b. decrease in the expected rate of return on investment caused by a decrease inbusiness confidence.c. increase in the rate of interest.d. decrease in the rate of interestarrow_forward1. Using the saving-investment diagram, explain the effects on the interest rate of: a. The government announces a large on-time bonus for veterans that is financed by additional taxes on the general public. b. Consumers become more focused on the future and thus decide to save more. c. The government introduces an investment tax credit that is financed by cuts elsewhere such that overall tax collections remain unchanged.arrow_forward
- 6. In macroeconomist mind, Explain how they are able to distinguish the terms between investment and saving. Then explain this condition either entering investment or saving and explain why you choose it. a. When your family takes out a loan from the banks and buys a new house. b. When you use your $250 paycheck to buy stock in UNILEVER. c. When your friend earns $50 and deposits it in his account at the bank. d. When you borrow $2,000 from a bank to buy a car to use in your business.arrow_forwardA rightward shift of the investment demand curve would be caused by a(an) a. increase in the expected rate of return on investment caused by an increase in business confidence. b. decrease in the expected rate of return on investment caused by a decrease in business confidence. c. increase in the rate of interest. d. decrease in the rate of interest.arrow_forwardIf firms are less optimistic that future profits will rise and remain strong for the next few years, then: Select one: a.Ā investment spending will fall. b.Ā investment spending will rise. c.Ā investment spending will remain unaffected. d.Ā investment spending will rise at first, then fall.arrow_forward
- both I 9. High interest rates might rates might saving. a. discourage; encourage b. discourage; discourage C. encourage; encourage d. encourage; discourage purchasing a house or car but at the same time high interestarrow_forward21.According to some modern theories of long run economic growth, successive increments of investment have________ returns since some fixed costs are ________ for subsequent firms.A. constant; identicalB. increasing; higherC. increasing; lowerD. decreasing; higherarrow_forwardWhy, other things remaining the same, does a rise in the real interest rate decrease the quantity of loanable funds demanded? The quantity of loanable funds demanded decreases because at a higher interest rate _______. A. fewer projects have an expected rate of profit below the real interest rate B. more projects have an expected rate of profit that exceeds the real interest rate C. banks want to lend more D. fewer projects have an expected rate of profit that exceeds the real interest ratearrow_forward
- The explanation for the slope of the Ā Ā A.Ā supply of loanable funds curve is based on the logic that a higher real interest rate leads to lower saving. B.Ā supply of loanable funds curve is based on the logic that a higher real interest rate leads to higher saving. C.Ā demand for loanable funds curve is based on the logic that a higher interest rate leads to higher saving. D.Ā demand for loanable funds curve is based on the logic that a higher interest rate leads to lower saving.arrow_forwardThe saving schedule is drawn on the assumption that as income increases, Select one: a. saving will increase absolutely but decline as a percentage of income. b. saving will decline absolutely and as a percentage of income. c. saving will increase absolutely and as a percentage of income. d. saving will increase absolutely but remain constant as a percentage of income.arrow_forwarda. The supply of loanable funds slopes upward because O higher interest rates make it more costly to borrow. O savers will make more funds available at lower interest rates. O investors will want more money made available at higher interest rates. savers will make more funds available at higher interest rates. b. The demand for loanable funds slopes downward because O few investment projects yield a high rate of return. O many investment projects yield an equal.rate of return. O many investment projects yield a high rate of return. O few investment projects yield a low rate of return.arrow_forward
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