Asked by Michelle Bradley on Jun 18, 2024
Verified
Congress and the President implement an investment tax credit. Which curve in the market for loanable funds shifts, which direction does it shift, and what happens to the interest rate?
Loanable Funds
Money available for borrowing, which is determined by the savings in the economy plus the money provided by banks and other financial institutions.
Interest Rate
The requisition, as a percentage of the principal, placed by lenders on borrowers for asset use.
- Detail the consequences of political decisions on personal and corporate saving behaviors, investment patterns, and interest rate fluctuations.
- Understand the roles of saving and investment incentives in economic policy.
Verified Answer
NS
Nicoy SmithJun 24, 2024
Final Answer :
The demand for loanable funds shifts right. The interest rate rises.
Learning Objectives
- Detail the consequences of political decisions on personal and corporate saving behaviors, investment patterns, and interest rate fluctuations.
- Understand the roles of saving and investment incentives in economic policy.
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