1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
Hoochie [10]
3 years ago
11

In January, the interest rate is 5 percent and firms borrow $50 billion per month for investment projects. In February, the fede

ral government doubles its monthly borrowing from $25 billion to $50 billion. That drives the interest rate up to 7 percent. As a result, firms cut back their borrowing to only $30 billion per month.
Which of the following is true?

a. There is no crowding-out effect because the government's increase in borrowing exceeds rm's decrease in borrowing.
b. There is a crowding-out effect of $20 billion.
c. There is no crowding-out effect because both: government and firms are still borrowing a lot.
d. There is a crowding-out effect of $25 billion.
Business
1 answer:
dem82 [27]3 years ago
5 0

Answer:

B, There is a crowding-out effect at $20,000,000

Explanation:

Crowding ot effect is an economic theory that shows that the more the public sector of an economy spends through borrowing, the lesser or non-existent is the ability of the private sector to borrow or spend. This is because there is a lot of deficit and this drives the interest rates higher. This goes on to affect the personal consumption of goods and services as well.

In the above question, because the government has increased its borrowing from $25 billion to $50 billion, firms wuld have to cut their own borrowing levels because it would require more than the usual amount to offset the loans the firms are used to taking seeing that interest rates have moved form 5% to 7%.

Cheers. I hope this is of help.

You might be interested in
The principle of diversification teaches us that using two securities it is always possible to find a portfolio with no short po
Oliga [24]

Answer:

C. Less than the variance of each asset, except when the two assets are perfectly positively correlated.

Explanation:

In diversification, there is the less risk in the portfolio that can be determined by the standard deviation. Also the risk can decrease at the time when the asset is lower than the perfect correlation and the same should be place in portfolio. Now if the asset along perfect positive correlation place in the portfolio so the the portfolio risk could be large than the risk of the individuals assets

6 0
3 years ago
For each of the goods, identify the characteristics that describe each good. Note that each good will be described with two char
Bad White [126]

Answer: PLEASE  see below for answer

Explanation: An excludable good is referred to as a private good which restrict people from using them while a non excludable goods are public goods that do not place restriction an so  people can access them eg park .

Also, Non-rivalrous goods are those goods that even though consumed by the people will not cause shortage of the  availability of the same goods to others.   A rivalrous good is the opposite as it causes shortage in availability  to others when used.

National Defence----Non excludable and Non Rivalrous

Pay-Per-View cable television---Excludable and NonRivalrous

a Hot Pocket sandwich--- Excludable and Rivalrous

private classroom education--- Excludable and Rivalrous

pajamas--- Excludable and Rivalrous

a unicycle ---- Excludable and Rivalrous

7 0
3 years ago
It is likely that airplane tickets will be increased by 5% each year for the next four years. The cost of the plane ticket to De
Luba_88 [7]

Answer:

The amount to save now is = $862.03 (to 2 decimal places)

Explanation:

In order to solve this, we will compute the end-of-year amounts using the 5% increase each year. This is done as follows:

Year 1 ending = $200

Year 2:

Year 2 beginning price = $200

Note that 5% increase = 5/100 = 0.05

increase in year 2 = 5% of 200 = 0.05 × 200 = 10

Year 2 new price = 200 + 10 = $210

Year 3:

beginning price = $210

increase in year 3 = 0.05 × 210 = $10.5

Year 3 new price = 210 + 10.5 = $220.5

Year 4

beginning price = $220.5

interest in year 4 = 0.05 × 220.5 = 11.025

new price in year 4 = 220.5 + 11.025 = $231.525

Next to calculate the amount needed to pay for one travel ticket per year for the next four years, we will add the prices of the tickets each year as follows:

Total amounts needed = 200 +210 + 220.50 + 231.53 = $862.03

5 0
3 years ago
In Free Market Environmentalism, economists Terry Anderson and Donald Leal write, "Subsidized irrigation encourages farmers to b
Soloha48 [4]

Answer:

b

Explanation:

7 0
3 years ago
MFS SAY DELETING MY SHIIII MBUYHJNMOJIHUNJ
Elanso [62]

Answer:

OOP-

Explanation: OnO

6 0
3 years ago
Read 2 more answers
Other questions:
  • A survey is​ valid, if it​ __________. produces distinct results in similar conditions
    15·1 answer
  • When a natural monopoly exists, it is
    9·1 answer
  • Easton Pump Company’s planned production for the year just ended was 19,300 units. This production level was achieved, and 20,60
    5·1 answer
  • What happens if you default on your student loans?
    7·1 answer
  • Mason Company paid its annual property taxes of $240,000 on February 15, 20X9. Mason also anticipates that its annual repairs ex
    12·1 answer
  • In questionnaire design, a question such as, "marketing is the best part of the business program, isn't it?" suffers from the pr
    9·1 answer
  • A company estimates that it can sell 5,000 headphone each week if it prices each set of headphones at $20. However, its weekly n
    11·1 answer
  • Oriole Corporation reported the following for 2020: net sales $1,235,200, cost of goods sold $721,800, selling and administrativ
    9·1 answer
  • What is the difference between marketing and merchandising? How do each of these concepts fulfill a different function in the bu
    15·2 answers
  • A business provides its employees with varying amounts of vacation per year, depending on the length of employment. The estimate
    13·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!