Outward shift in the demand for capital occurs

Assignment Help Business Economics
Reference no: EM13795719

Which of these four scenarios are most important today? Your answer may include more than one scenario.

Four Scenarios are:

1) Outward Shift in the demand for capital occurs in an economic boom when increased construction of plants, buildings and other capital-intensive business activities requires huge outlays of investment. In this scenario, interest rates tend to rise along with capital invested.

2) Decreased shift in the demand for capital ocurs in an economic downturn or recession. The economy stops growing, the real estate market collapses, and new building permits drop. The result? Lower interest rates and less capital invested.

3) Outward shift in supply of capital occurs in situations where new sources of capital enter the market, either from a domestic savings (people desire to save more) or foreign investment sources. The greater the supply of capital requires banks and other intermediaries to reduce the interest rates and encourage more borrowing. Net result: Lower interest rates and more capital invested.

 

4) Inward shift in the supply of capital occurs when people decide to cut back on their savings or foreigners withdraw investment capital. With fewer loan-able funds available, banks and other financial institutions must ration the funds, causing interest rates to climb and fewer investments projects. Net result: Higher interest rates, less capital invested.

Reference no: EM13795719

Questions Cloud

Which firm would you expect to make the lowest profits : Which firm would you expect to make the lowest profits, other things equal? Bertrand oligopolist. Cournot oligopolist. Sweezy oligopolist Stackelberg leader
Problems related to food safety & technology : Define organic foods and the process involved with becoming a certified organic farm.
Diversity and cultural competency : Diversity and cultural competency-what issues related to diversity and cultural competency are at play? Are such issues even being considered?
Sales for the largest four firms in the industry equal : Suppose the market for good X has a four-firm concentration ratio of 0.50. Furthermore, assume that total sales in the industry are $1.2 million. Based on this information, we know that sales for the largest four firms in the industry equal (in aggre..
Outward shift in the demand for capital occurs : Outward Shift in the demand for capital occurs in an economic boom when increased construction of plants, buildings and other capital-intensive business activities requires huge outlays of investment. In this scenario, interest rates tend to rise alo..
Terrorist attacks on the united states : Since the terrorist attacks on the United States on September 11, 2001, America has been forced to reexamine the balance between liberty and security.
Assignment on need for sustainability manager : A Sustainability Manager provides a specific focus on the environmental and social concerns of the company. In this assignment you will explore the importance of this position and the incorporated responsibilities.
Basic categories of earth''s chemical composition : How can the information gathered from the mission benefit the field of oceanography?
Imposition of this per-bag tax : According to the figure, because of the imposition of this per-bag tax, the price buyers now pay and the price sellers get to keep (net) equals: A) $28 and $48, respectively B) $39 and $28, respectively C) $48 and $28, respectively D) $39 and $39, re..

Reviews

Write a Review

Business Economics Questions & Answers

  Compute the contributions to gdp of these transactions

Compute the contributions to GDP of these transactions, showing that expenditure also income approaches give the same answer.

  Compute the marginal products associated

compute the marginal products associated with K, L, F. Illustrate what is American's MRTS between K and L.

  Illustrate what president roosevelt might have

Elucidate Illustrate what President Roosevelt might have been trying to achieve, using the model of aggregate demand also aggregate supply

  How is it possible for both to have increased.

there was a month in which employment and the unemployment rate both rose. Assuming the computations were correct, how is it possible for both to have increased.

  What is the p value and you conclusion at an alpha level

A shareholders' group, in lodging a protest, claimed that the mean tenure for a chief executive office was at least nine years. A survey of companies reported in the Wall Street Journal found a sample mean tenure time of 7.27 years with a standard de..

  Qbriefly what is probability1 work the following problems 2

q.briefly what is probability1 work the following problems 2 tell me what rule or principle you used to solve them and

  Explain the entities affected by industrial regulation

Explain the entities affected by industrial regulation in terms of market structure. Explain why industrial regulation affects those entities you identified.

  Firms raise capital from investors by issuing shares in the

firms raise capital from investors by issuing shares in the primary markets. does this imply that corporate financial

  Controls the operating system market

Suppose that a computer software company controls the operating system market. Although the government knows that the price is higher than it would be in the presence of competition, it believes that such profits are crucial to incentivizing innovati..

  Q1 a has the us economy experienced inflation or deflation

q1. a has the u.s. economy experienced inflation or deflation during recent recessions? elucidate.b can the inflation

  Elucidate your reason based on the burden of tax paid

If you were to emmigrate from earth, would you rather land and work in Thisuni or Nisuthi. Elucidate your reason based on the burden of tax paid by workers and firms.

  Illustrate what is nicks gross demand for x

Which he can trade at the going prices. He has no other source of income. Illustrate what is Nick's gross demand for x.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd