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10SQ7 - [3 Cause Effect 3 a Please utilize the loanable...

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Please turn in your answer in the beginning of Exam 2. Eco. 1A. Quiz 7. Name: _____________________. ID: ____________________. 1. Under what assumptions we can use DLF and SLF curves to describe the loanable funds market? [3] (1) (2) (3). 2. Use DLF and SLF curves to evaluate graphically the effect of “the demand for loanable funds increases, i.e., DLF↑ and the supply of loanable funds increases, i.e., SLF↑,” on r and I. Please state “cause” and “effect” explicitly
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Unformatted text preview: . [3] Cause: Effect: 3. a. Please utilize the loanable funds market, i.e., PDLF, DLFD & SLF, to examine the impact of government budget deficit, i.e., T - G < 0 on real interest rate (r) quantity of private loanable fund demanded (I) graphically . Also state Cause and Effect explicitly. [4] Cause: Effect: b. What is crowding out effect? Show the amount of crowing out in the graph in a. [2]...
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