Sia
Question
Statistics
Posted 8 months ago
Which model would be used to show the impact of government deficit spending on the real interest rate?
Choose 1 answer:
(A) The production possibilities curve
(B) The money market
(C) The circular flow diagram
(D) The AD-AS model
(E) The market for loanable funds
Sign in to unlock the answer
Answer from Sia
Posted 8 months ago
Solution by Steps
step 1
Identify the economic model that illustrates the relationship between government deficit spending and the real interest rate
step 2
Recognize that government deficit spending typically increases the demand for loanable funds
step 3
Understand that the market for loanable funds model shows how the supply and demand for loanable funds determine the real interest rate
step 4
Conclude that the correct model to show the impact of government deficit spending on the real interest rate is the market for loanable funds
Answer
E
Key Concept
Market for Loanable Funds
Explanation
The market for loanable funds model is used to illustrate the impact of government deficit spending on the real interest rate, as it shows the interaction between borrowers and lenders and how it affects interest rates.
Not the question you are looking for? Ask here!
Enter question by text
Enter question by image
Unlock Smarter Learning with AskSia Super!
Join Super, our all-in-one AI solution that can greatly improve your learning efficiency.
30% higher accuracy than GPT-4o
Entire learning journey support
The most student-friendly features
Study Other Question