Chapter 13.5

Chapter 13.5 - o#3 o A surplus increase ss which lowers the...

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Shifts to Saving Supply: o Any tax incentives or anything that will change that incentives to save. o IE: Lower the tax on interest income. This would increase savings supply. The real interest rate: Decreases. Level of savings and investment: Increases. #A. Shifts Investment Demand: o Tax credits to firms, o #2. Government surpluses and deficits. o If the government runs a deficit, what would this to the real interest rate and level of savings and investment.
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Unformatted text preview: o #3. o A surplus increase ss which lowers the equilibrium + real interest rate and increases savings and investment. • Tip: o What would a budget surplus from government do to producer surplus?/ o You have unknown effect. o You have compounding effects. You don’t know what’s going to happen. When supply shifts, you don’t know what happens to producer surplus. o TEST. o Treat is like any other supply and demand model....
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This note was uploaded on 04/24/2009 for the course ECON 2105h taught by Professor Staff during the Spring '08 term at UGA.

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