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Volgvan
4 years ago
12

Initially, in a borrowing and lending market, or a loanable funds market, there is an equilibrium. Suppose entrepreneurs' aggreg

ate expectations are that the economy is going to be good next year (i.e. opportunities for investment). What is likely to happen to the equilibrium interest rate under the following scenarios: 1. There is no change in the loan supply curve; 2. Potential lenders disagree with entrepreneurs, lenders view the future economic outlook as negative/riskier. Answer both cases using the theory of loanable fund markets.
Business
1 answer:
Semenov [28]4 years ago
7 0

Answer:

At the inception of a borrowing and lending market or a loan-able funds market, there was an equilibrium and the entrepreneurs expect the economy to be good both presently and in the subsequent years. For instance, increase in opportunities for investment which says that the demand for loans will increase in near future.  The theory of the loan-able funds market says that " the rate of interest for lending is determined by the demand for and supply of loan-able funds".

1. As the main source of demand is a demand for investment which is likely to increase it will shift the demand curve towards right. The loan supply curve doesn't change as mentioned in the question. Hence, the equilibrium will shift upward i.e. the price of the funds which is the interest rate will increase.

2. Potential lenders disagreeing with entrepreneurs with having a pessimistic view will lead to a reduction of supply of funds in the market which will take the supply curve towards left. And the entrepreneurs have the opposite view which has already shifted the demand curve to right. So ultimately the new equilibrium interest rate will be much higher than the previous equilibrium interest rate.

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Mr. Draper is the hiring manager of a large corporation. He has been asked to recruit two new sales executives for the firm spec
balandron [24]

Answer:

The correct option is D,maximum job offer

Explanation:

Low job offer is offering job to new hands with pay that is lower than available elsewhere,hence less motivating for employees have guaranteed existing employment.

Competitive is when pay is similar to that which is obtainable elsewhere may be as offered by a rival firm.

The job at hand is poaching proven hands from  another company,hence for the roles to be filled in no distant  time,Mr Draper should give maximum job offer which is a pay that is above that which is available elsewhere.

7 0
4 years ago
Cory opens a small jewelry store but has difficulty competing with Bling Jewels, a much larger firm. In his newspaper ad, Cory i
Daniel [21]

Answer:

The answer is Slander of title

Explanation:

Slander of title occurs when false and malicious written or spoken public statement about an individual's ownership of property that causes harm.

8 0
4 years ago
An economy produces 10 cookies in year 1 at a price of $2 per cookie and 12 cookies in year 2 at a price of $3 per cookie. From
Vaselesa [24]

From year 1 to year 2,  the real GDP of the economy increases by 20%.

<h3>What is real GDP?</h3>

Gross domestic product is the total sum of final goods and services produced in an economy within a given period which is usually a year.

Real GDP is GDP calculated using base year prices. Real GDP has been adjusted for inflation. It reflects the value of goods and services produced in an economy.

<h3>What is the increase in real GDP?</h3>

GDP in year 1 = 10 x $2 = 20

Real GDP in year 2 using year 1 prices as base price = 12 x $2 = $24

Increase in real GDP = (24 / 20) - 1 = 20%

To learn more about GDP, please check: brainly.com/question/15225458

5 0
2 years ago
A lender estimates that the closing costs on a $165,000 home loan will be $6,187.50. The actual closing costs were 3.5% of the l
Ivanshal [37]
Home loan amount = $165,000

Estimated closing costs = $6,187.50 

% of estimated closing cost = ?

$165,000 * x% = $6,187.50
x% = $6,187.50 ÷ $165,000
x% = 0.0375
x = 0.0375 x 100 = 3.75

Therefore, estimated closing costs = 3.75% of loan amount = 3.75% of $165,000

Actual closing costs = 3.5% of loan amount = 3.5% of $165,000 = $5775

Difference in estimated and actual closing cost percent = 3.75% - 3.5% = 0.25%

The closing costs were lower than the estimate by 0.25%
5 0
3 years ago
Read 2 more answers
Ann Chovies, owner of the Perfect Pasta Pizza Parlor, uses 20 pounds of pepperoni each day in preparing pizzas. Order costs for
coldgirl [10]

Answer:

Option (A) is correct.

Explanation:

Given that,

Order costs for pepperoni = $10.00 per order

Carrying costs = 4 cents per pound per day

Lead time for each order = 3 days

Pepperoni itself costs = $3.00 per pound

Total Order = 80 pounds of pepperoni

Demand rate = 20

Total ordering cost = Total order × cost per order

                                = 80 × $10

                                = $800

Length of an order cycle:

=\frac{Order\ quantity}{Demand\ rate}

=\frac{80}{20}

= 4 days

3 0
3 years ago
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