What would be the effect on the loanable funds market of an increase in the corporate profits tax? (Assume that the government maintains a balanced budget.)
a. The demand for funds would decrease, lowering the interest rate and leading to lower private investment.
b. The demand for funds would increase, raising the interest rate and leading to higher private investment.
c. Both the demand and the supply of funds would increase, lowering the interest rate and leading to lower private investment.
d. The supply of funds would increase, lowering the interest rate and leading to higher private investment.
e. The supply of funds would decrease, raising the interest rate and leading to lower private investment.
A
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Marginal revenue product is
A) marginal physical product multiplied by marginal revenue. B) marginal physical product multiplied by average variable cost of the product. C) the price of the product. D) the total revenue from the sale of the product sales.
The importance of the production possibilities curve is that it shows the different combinations of goods and services that a society can produce: (check all that apply)
a. efficiently. b. given a fixed amount of resources. c. given a fixed state of technology. d. given an unlimited amount of resources. e. when marginal benefit equals marginal cost. f. in a fully employed economy.