Ask Question
BusinessBusiness
9 February, 14:13

If the government reduces transfer payments, what happens to the budget deficit? What curve does this change in the market for loanable funds, which direction does it shift, and what happens to the equilibrium interest rate?

+4
Answers (1)
  1. 9 February, 14:30
    0
    The budget deficit will decrease The curve it changes is the loanable funds curve The loanable funds curve shifts to the right The equilibrium interest rate falls

    Explanation:

    The reduction in transfer payments by Government will cause the budget deficit of the Government to decrease and also the the decrease in the Budget deficit will lead to the availability of loanable funds thereby causing the loanable funds curve to shift to the right.

    With the availability of loanable funds the equilibrium interest rate will fall below its usual equilibrium level. and the Government can reduces transfer payments to achieve all of this.
Know the Answer?
Not Sure About the Answer?
Find an answer to your question 👍 “If the government reduces transfer payments, what happens to the budget deficit? What curve does this change in the market for loanable ...” in 📗 Business if the answers seem to be not correct or there’s no answer. Try a smart search to find answers to similar questions.
Search for Other Answers
You Might be Interested in
A small wine and cheese store in Milwaukee sells dozens of different type of cheese: Bulgarian, French, Danish, Greek, and a domestic from its home state of Wisconsin. The domestic Wisconsin cheese sells for $1.
Answers (1)
Recording known current liabilities C2 1. On July 15, Piper Co. sold $10,000 of merchandise (costing $5,000) for cash. The sales tax rate is 4%. On August 1, Piper sent the sales tax collected from the sale to the government.
Answers (1)
Over the last 50 years in the US, GDP per person has grown at approximately 1% per year, while capital per person has been accumulating at around 0.5% per year. Assume a capital share of 0.3. What is the growth rate of the Solow residual?
Answers (1)
Keystone Corporation's balance sheet showed the following liability and stockholders' equity amounts: Current Liabilities, $100,000; Bonds Payable, $150,000; Long-Term Lease Obligations, $20,000; Deferred Income Tax Liability, $5,000;
Answers (1)
Why do companies commonly place new hires on probation?
Answers (1)
New Questions in Business
2. Let's work out a simple example where a person smooths her consumption over time. Gwen is a real estate agent, and she knows that she will have some good years and some bad years.
Answers (1)
What is the process of an economy's increasing industrialization, standard of living, and economic wealth.
Answers (2)
the context of bringing the code of ethics of a company to life, which of the following statements is true when experts try to advocate a forceful, integrated approach to ethics?
Answers (1)
Privatisation leads to ... A) Lower productivity and lower profit B) Higher productivity and higher profit C) Higher productivity and lower profit D) lower producitivity and lower profit
Answers (1)
As of December 31, 2019, Armani Company's financial records show the following items and amounts. Cash $ 10,000 Accounts receivable 9,000 Supplies 6,000 Equipment 5,000 Accounts payable 11,000 A. Armani, Capital, Dec. 31, 2018 16,000 A.
Answers (1)
Home » Business » If the government reduces transfer payments, what happens to the budget deficit? What curve does this change in the market for loanable funds, which direction does it shift, and what happens to the equilibrium interest rate?
Sign Up Forgot Password?