Chapter 10Does a change in the real interest rate shift the supply of loanable funds curve? Explain...

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Chapter 10Does a change in the real interest rate shift the supply of loanable funds curve? Explain youranswer.

Chapter 11

The Fed conducts an open market operation and increase a bank's excess reserves by $5,000. Explain the first five rounds of the money creation process if the desired reserve ratio is 20% and if people keep no currency outside of the banking system.

Chapter 14Explain the basic idea of the expenditure multiplier and the role consumers play.
Each of your answer needs to include the page number from the book.

chapter-14-zjvfa4ue-juqloxn0.pdf chapter-10-and-11-1pnwzypm-jhkv4h5d.pdf

Komalavalli · Accepted Answer

Chapter 10 (page No 255-57)
The overall amount of loanable funds supplied during a given time is the cumulative amount of money available from private investments, the federal budget surplus, and international borrowing. Saving is the primary source of loanable money. Some sources include a federal spending balance and overseas borrowing. Other things are equal, the higher the real interest rate, the greater the supply of loanable funds; and the lower the real interest rate, the less supply of loanable funds.
When there are increases in discretionary income, asset, projected future income, or default risk, the availability of loanable funds changes.
Disposable Income: The discretionary income of a household is the income received minus net taxes Other factors being equal, the greater a household's discretionary income, the greater its ability to save.
Wealth: The wealth of a family is defined by what it owns other factors being equal, a household with more money would save less than a household with less wealth.
Expected future profit:
Other things being equal, the higher a household's projected future disposable income rises, the less it can save today: If two households have the same current disposable income, the household with the higher estimated future disposable income will spend a larger portion of its current disposable income on consumer goods and services, resulting in fewer savings today.
Default risk :The possibility that a debt will not be repaid, or will not be repaid in full, is known as default risk. The higher the risk, the higher the interest rate required to entice a lender to lend, and the lower the availability of loanable funds. Default risk is minimal in normal times, but in times of financial crisis, as asset values fall, default may become common.

Chapter 10Does a change in the real interest rate shift the supply of loanable funds curve? Explain youranswer. Chapter 11 The Fed conducts an open market operation and increase a bank's excess...

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