Macroeconomics 1st Edition by Dean Karlan,Jonathan Morduch

تمرين 14

Consider the U.S. market for loanable funds in a closed-economy model. Answer the following questions about each scenario.
a. The government starts offering a national savings bond to increase private savings, which pays a higher return than many other options available on the market. Which way will the supply of loanable-funds curve shift? Will the interest rate increase or decrease? Will there be more or less borrowing?
b. Suppose the economy is now open. Due to rapid economic expansion in China, the Chinese government decides to invest in U.S. Treasury notes with some of its surplus. Which way will the supply curve shift?
c. A new computer software program is introduced into the market, which offers businesses that purchase it promising returns on their investment. Which curve will shift? Which way will it shift?
d. The government reduces the capital gains tax, which taxes earnings on assets in the stock market. Which curve will shift? Which way will it shift?