(answered) – 1) In this question you analyse the effects of the followingDescriptionSolution downloadThe QuestionWhy does a country GDP not grow at a constant rate in reality?I also need help for the attached question Thanks!1) In this question you analyse the effects of the following economic policies in the loanablefund market diagram where we have real interest rate on a vertical axis and the quantityof loanable funds on a horizontal axis.a) (4 marks) Start in the initial equilibrium point A in below Figure where the quantitydemanded of loanable funds (IA) equals the quantity supplied of loanable funds (SA).Demonstrate and explain the effect of an increases of the government revenue in theloanable fund market. Your explanation must also include what happens to the realinterest rate, the level of national savings, and the level of investment as well.Answer here (Tips: to create new lines, simply copy the existing curves and move to the new locations)SupplyS1Real InterestRateS2ADemandSA = IAQuantity ofLoanable Fundb) (4 marks) You now realise that the increased government revenues (that you analysedin Part a) coming from tax increases affecting the (after-tax) profitability of newinvestment. Following from your analysis in Part a), use the loanable funds model todemonstrate this policy effect and make a comparison to an analysis in Part a). Youmust also demonstrate your answers in Figure and explain.Answer here (Tips: to create new lines, simply copy the existing curves and move to the new locations)SupplyReal InterestRateS1ABSA = IADemandD1Quantity ofLoanable Fund
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