18. Using diagrams of the market for capital, determine the effect of the following events on market

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18. Using diagrams of the market for capital, determine the effect of the following events on market interest rates:

a. Consumers increase their saving rate.

b. Advances in nanotechnology reduce firms’

costs and increase estimates of future profits.

c. Congress eliminates the tax deductibility of contributions to 401k savings plans.

d. The Federal Reserve floods banks with new money.

e. Banks tighten lending standards.

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Microeconomics

ISBN: 9780716759751

1st Edition

Authors: Austan Goolsbee, Steven Levitt, Chad Syverson

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