Unformatted text preview: funds. (Hint: Expenditure on inventories is a type of investment.) What do you think has been the effect on investment in factories and equipment? 14. “Some economists worry that the aging populations of industrial countries are going to start running down their savings just when the investment appetite of emerging economies is growing” ( Economist, May 6, 1995). Illustrate the effect of these phenomena on the world market for loanable funds. 15. This chapter explains that investment can be increased both by reducing taxes on private saving and by reducing the government budget deficit. a. Why is it difficult to implement both of these policies at the same time? b. What would you need to know about private saving in order to judge which of these two policies would be a more effective way to raise investment?...
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This note was uploaded on 07/30/2010 for the course ECON 120 taught by Professor Abijian during the Spring '10 term at Mesa CC.
- Spring '10