Explain and show graphically how an increase in government spending affects the equilibrium interest rate in the market for loanable funds
What will be an ideal response?
When government spending increases, government saving (T - G - TR) falls. This decrease in government saving shifts the supply curve for loanable funds to the left, increasing the equilibrium interest rate as shown below.
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During the second half of the nineteenth century and first half of the twentieth century, per capita incomes on the West Coast of the US were ___ than the national average, and per capita incomes in the South were ___ than the national average
a. lower, higher. b. higher, lower. c. lower, lower. d. higher, higher.
Under perfect competition, _____
a. firms have zero market power b. a single firm produces all of the output in the market c. firms sell differentiated products d. the marginal revenue received by a firm is greater than price