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
Mamont248 [21]
3 years ago
10

The economy begins in equilibrium at point E, representing the real interest rate r1 at which saving S1 equals desired investmen

t I1. What will be the new equilibrium combination of real interest rate, saving, and investment if there is a tax law change that makes investment projects less profitable and decreases the demand for investment goods (but does not change the amount of taxes collected in the economy)
Business
1 answer:
Ad libitum [116K]3 years ago
8 0

Answer:

A lower equilibrium point due to decreased investment, decreased real interest rate and decreased level of savings

Explanation:

The economic graph that is referred to in the question in referred to as the IS-LM curve which depicts the intersection of the IS (Investment-savings curve) with the LM (liquidity preference-money supply) curve. This intersection determines thr equilibrium between real interest rates and the output/consumption at that level of interest rate. The IS curve is downward sloping while the LM curve is upward sloping.

The tax law change makes the investment less attractive which will cause the IS curve to pull inwards (i.e a shift to the left). This shift to the left essentially reduces the level of investment thereby lowering the demand for money for investment. This reduction in demand causes the real interest to decrease. At this decreased interest level, there is a decrease in the the level of savings (because of the lower return that is available on money saved). Therefore the impact will result in a new lower equilibrium at which the real interest rate and the levels of saving and investment will be lower than the original equilibrium level.

You might be interested in
Steve’s Outdoor Company purchased a new delivery van on January 1 for $47,000 plus $4,000 in sales tax. The company paid $13,000
cupoosta [38]
Sorry idk the answers i’m just trying to ask my questions... sorry
3 0
3 years ago
All of the following statements regarding accounting treatments for liabilities under U.S. GAAP and IFRS are true except:_______
mihalych1998 [28]

Answer:

A) Accounting for bonds and notes under US GAAP and IFRS is similar.

Explanation:

US GAAP and IFRS do not have the same accounting guideline for bond issue cost:

Under US GAAP, bonds payable is recorded at face value while premiums or discounts are recorded separately. While under IFRS, bonds payable is recorded using the carrying value, and amortization or premiums or discounts is done by using the effective-interest method.

5 0
2 years ago
Keeping in mind what you did in the lab this week, do you think that determining the volumes of your solid samples (rubber stopp
Over [174]

Answer:

Calculating volumes by water displacement is always more accurate than using mathematical formulas when the objects have irregular shapes or it is difficult to measure them exactly. The only thing that you must keep in mind is measuring the water displacements properly. One ml of water equals 1 cm³, so if the water level increased by 5 ml, then the object's volume is 5 cm³.

3 0
2 years ago
A friend offers you a ticket to a Chicago Cubs baseball game for $40. You know you can sell the ticket to another friend for $50
olganol [36]

Answer:

$50

Explanation:

Opportunity cost is the cost of the next best option forgone when one alternative is chosen over other alternatives.

If I decide to go to the game, I forgot the opportunity of selling the ticket for $50 which is the next best use of the ticket.

I hope my answer helps you

6 0
2 years ago
A person whose license has been cancelled or revoked, whether by voluntary action or by disciplinary action of the Board, may af
butalik [34]

Answer:

The appropriate fill-in-the-blank is 05 years. Thus the statement becomes

A person whose license has been cancelled or revoked, whether by voluntary action or by disciplinary action of the Board, may after <u>05</u> years from the effective date of such cancellation or revocation, petition the Board for reinstatement of the license, unless another time is provided in the cancellation or revocation order, or unless no provision was made in the order for reinstatement. This section does not apply to licensees who let their licenses lapse for non-payment of renewal fees or licensees against whom a cancellation or revocation proceeding is not pending before the Board or in any other jurisdiction.

Explanation:

According to the KRS 335.360, A person whose license has been revoked is eligible to apply for reinstatement after 05 years.

4 0
3 years ago
Other questions:
  • Harrison Corp. wants to raise its level of service to enhance customer experience. The board of directors send out an email cont
    15·1 answer
  • In the purchasing decision process, the ________ are those who have the power to prevent sellers or information from reaching me
    9·1 answer
  • The evaluations of financial information through analysis of plausible relationships among financial and nonfinancial data is th
    10·1 answer
  • Bradley Company purchased a machine for $34,000 on January 1, 2017. It depreciates the machine using the straight-line method ov
    5·1 answer
  • A(n) ____ is a professional communication that accompanies your résumé when you respond to a job advertisement or are simply int
    12·1 answer
  • Identify 3 duties you would expect an accountant to perform​
    10·2 answers
  • Barney decides to quit his job as a corporate accountant (which pays $10,000 a month) and go into business for himself as a cert
    12·1 answer
  • Marsh uses a perpetual inventory system. On December 29, Marsh, Inc. sold inventory for $5,500 on account with terms 2/10 n/30.
    11·1 answer
  • Zeke shares the company’s organizational chart with employees during an all-staff meeting
    11·1 answer
  • ADVANCED ANALYSIS Assume the following values for the figures below: Q1 = 20 bags. Q2 = 15 bags. Q3 = 27 bags. The market equili
    12·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!