UNIT 4 – BU204 – MACROECONOMICS 1<\/p>\n
Unit 4 Assignment Template: Savings, Investment Spending, and the Financial System <\/p>\n
Name: ______________<\/p>\n
BU204 Section Number: ______ <\/p>\n
Date: ______________<\/p>\n
Assignment<\/p>\n
This assignment addresses how the loanable funds market matches savers with borrowers and the impact of various market pressures on interest rates and money availability.<\/p>\n
1. Explain how overall national savings relates to overall investment and why savings is always equal to investment.<\/p>\n
(Enter response here.)<\/p>\n
2. The following formulas are very important in macroeconomics: <\/p>\n
1) Y = C + I + G + EX \u2013 IM <\/p>\n
2) S = (Y \u2013 T \u2013 C) + (T \u2013 G)<\/p>\n
Identify the components of each formula.<\/p>\n
(Enter response here.)<\/p>\n
Explain the relationship between the two formulas.<\/p>\n
(Enter response here.)<\/p>\n
3. Explain how changes in interest rates will affect the amount of money that people save. <\/p>\n
(Enter response here.)<\/p>\n
4. Explain how changes in interest rates and rates of return on various investment options will affect the amount of money that businesses are willing to invest to increase output.<\/p>\n
(Enter response here.)<\/p>\n
5. Explain how government tax revenue and government spending create either a budget surplus or budget deficit. How does that difference affect the market for loanable funds? <\/p>\n
(Enter response here.)<\/p>\n
6. Use the market for loanable funds shown in the accompanying diagram to answer the following questions for each of the three scenarios: What will the likely results be on: 1) quantity of money saved, 2) interest rates, and 3) additional business investment. For all scenarios, assume that there are no external controls on interest rates.<\/p>\n
Description: A graph showing the supply, in a red straight line rising to the right, and demand, in a straight blue line descending to the right, for loanable funds with the market interest rates on the vertical axis and money available on the horizontal axis. Initial equilibrium is at 8% interest rate and 300 million dollars.<\/p>\n
a. The government significantly increases its borrowing to fund its growing deficit.<\/p>\n
(Enter response here.)<\/p>\n
b. At any given interest rate, a significant number of middle-class consumers decide to use their credit cards to fund additional purchases. Assume no change in government borrowing.<\/p>\n
(Enter response here.)<\/p>\n
c. At any given interest rate, many major businesses become pessimistic about the future profitability of investment spending. Assume no change in government borrowing.
(Enter response here.)<\/p>\n
———————-<\/p>\n
References:<\/p>\n
Author. (Date.) Title. Source.<\/p>\n
Directions for Submitting Your Assignment <\/p>\n
Before you submit your assignment, you should save your work on your computer and use the correct filename that is specified in item 1 of the General Instructions for all assignments. When you are ready, submit to the Unit 4 Assignment Dropbox.<\/p>\n","protected":false},"excerpt":{"rendered":"
UNIT 4 – BU204 – MACROECONOMICS 1 Unit 4 Assignment Template: Savings, Investment Spending, and the Financial System Name: ______________ BU204 Section Number: ______ Date: ______________ Assignment This assignment addresses how the loanable funds market matches savers with borrowers and the impact of various market pressures on interest rates and money availability. 1. Explain how […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[10],"class_list":["post-93871","post","type-post","status-publish","format-standard","hentry","category-research-paper-writing","tag-writing"],"_links":{"self":[{"href":"https:\/\/papersspot.com\/blog\/wp-json\/wp\/v2\/posts\/93871","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/papersspot.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/papersspot.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/papersspot.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/papersspot.com\/blog\/wp-json\/wp\/v2\/comments?post=93871"}],"version-history":[{"count":0,"href":"https:\/\/papersspot.com\/blog\/wp-json\/wp\/v2\/posts\/93871\/revisions"}],"wp:attachment":[{"href":"https:\/\/papersspot.com\/blog\/wp-json\/wp\/v2\/media?parent=93871"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/papersspot.com\/blog\/wp-json\/wp\/v2\/categories?post=93871"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/papersspot.com\/blog\/wp-json\/wp\/v2\/tags?post=93871"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}