Even complicated and confusing topics will be easily developed and covered if you request our help writing an essay. Place an order today!

Need an research paper on economical strategy of the government. Needs to be 5 pages. Please no plagiarism. From the diagram, the demand of the loanable sum is inversely related to the interest rate (r). Firms generally will compare the expected profitability of investments with the interest rate. At lower interest rates, projects are profitable, and there will be a higher demand for loanable funds. When the government finances the fund from the private pool, the demand increase by the government expenditure minus the tax income (G – T ).

The increase in government financing reduces the availability of loanable sum in the market. Equilibrium of the supply and demand curve is disturbed and shifted to a higher interest rate. Both national saving and investment would be lower. The government loan forces the investor to compete for real interest rate make investment less attractive, assuring that investment will decrease (I shift to I’ in the diagram) along with the national saving. This is called crowding out. It causes lower economic growth. Economist generally advises reducing the deficit.

When the government switched from public to bank for credit, the supply of loanable fund to the market reduced. This thus causes a shift of the supply line to the left as in the diagram. The result of the reduction of the loanable fund is the increase in the interest rates of the loan. Private sector or firm will try to reduce their loan due to the high interest. There will not be a lot of projects going on and as a consequence, the investment in the country will drop. Both situation 1 and 2 would result in inflation as interest rate increased.

When money falls from a helicopter, the supply of money or the saving hold by the public in the market increases. In the diagram, this is illustrated by the shift of the supply curve (S) to the right (S’). The household expenditure might increase due to the increase in saving. Thus, the interest rate reduces (from r to r’) and the demand for loanable funds increases (from I to I’). From the reduction of interest rate, more loan will be taken out to construct development projects. This is a situation where the money in the market increase without causing inflation.

Scenario II In the same economy the money market adheres to the principles of the classical model but the commodity market displays a substantial amount of Keynesian unemployment with stable prices.

A few assumptions for Keynesian model: prices & wages are fixed at a given level at these price & wage levels, there is involuntary unemployment (there are workers without a job who would like to work at the going market real wage).

testimonials icon
Need help with just 1 question and that too some parts.Not full questions.If someone can help I will use you again...
testimonials icon
Create a presentation of 10- to 12-slides in Microsoft PowerPoint that addresses any one of the following topics of...
testimonials icon
Question Description write a 200...
testimonials icon
Linda and Tisha I agree that there are many different environments where abuse may take place and it is not always the care giver. In a society whe...
testimonials icon
In this essay, you will provide an overview of the server-side and client-side hardware and software requirements of your information system.  You...
testimonials icon
The most effective advertising pushes the customer to the Web, no matter what advertising channel is used. A marketing plan i...
testimonials icon
Selected Company: Singtelas the chosen company, the analysis should be based only on one of the company's business units, e.g. one of t...
testimonials icon
Deliverable Length:(Discussion) 400-500 words APA FormatAssignment Objectives:Distingu...
testimonials icon
Running head: POSITIVE SOCIAL CHANGEPositive Social ChangeNameInstitution1POSITIVE SOCIAL CHANGE2Positive Social ChangeThis course has allowed me to...
testimonials icon
Students, please view the “Submit a Clickable Rubric Assignment” in the Student Center. Instruc...
testimonials icon
Email writing AssignmentYouhave recently checked your grades on eCampus and realized that your professorincorrectly input a grade. The grade cent...

Other samples, services and questions:

Calculate Price

When you use PaperHelp, you save one valuable — TIME

You can spend it for more important things than paper writing.

Approx. price
$65
Order a paper. Study better. Sleep tight. Calculate Price!
Created with Sketch.
Calculate Price
Approx. price
$65