Multiple Choice QuestionWhich of the following describes how the supply curve of loanable funds would be affected if the government expanded programs to cover medical costs more fully?Multiple choice question.The supply of loanable funds would decrease and shift to the rightThe supply of loanable funds would increase and shift to the rightThe supply of loanable funds would decrease and shift to the leftThe supply of loanable funds would increase and shift to the left
Question
Multiple Choice QuestionWhich of the following describes how the supply curve of loanable funds would be affected if the government expanded programs to cover medical costs more fully?Multiple choice question.The supply of loanable funds would decrease and shift to the rightThe supply of loanable funds would increase and shift to the rightThe supply of loanable funds would decrease and shift to the leftThe supply of loanable funds would increase and shift to the left
Solution
The supply of loanable funds would decrease and shift to the left.
Here's why:
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When the government expands programs to cover medical costs more fully, it typically means the government is spending more money.
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This increased government spending often has to be financed by borrowing, which means the government would need to take out more loans.
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When the government borrows more, it increases the demand for loanable funds.
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An increase in demand, without an increase in supply, leads to a shortage. In the loanable funds market, this shortage is often depicted as a leftward shift of the supply curve.
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Therefore, the supply of loanable funds would decrease and shift to the left.
Similar Questions
Multiple Choice QuestionWhich of the following would result in a rightward shift of the supply curve for loanable funds?Multiple choice question.An increase in tastes and preferences for moneyAnything that causes households to increase savingsA decrease in tastes and preferences for moneyAnything that causes a decline in household savings
Multiple Choice QuestionWhich of the following describes the effect on the supply of loanable funds if interest earned on savings were to be suddenly exempted from taxes?Multiple choice question.The supply of loanable funds would decrease and shift to the rightThe supply of loanable funds would increase and shift to the rightThe supply of loanable funds would increase and shift to the leftThe supply of loanable funds would decrease and shift to the left
Multiple Choice QuestionWhich of the following would cause the supply of loanable funds to shift to the left?Multiple choice question.Anything that causes a decline in savingsA decrease in a nation's incomeA decline in household spending on consumer goodsAnything that causes households to save more
If there is a shortage of loanable funds, thenGroup of answer choicesneither curve shifts, but the quantity of loanable funds supplied increases and the quantity demanded decreases as the interest rate rises to equilibrium.the supply for loanable funds shifts right and the demand shifts left.the supply for loanable funds shifts left and the demand shifts right.neither curve shifts, but the quantity of loanable funds supplied decreases and the quantity demanded increases as the interest rate falls to equilibrium.
A decrease in the supply of loanable funds will __________ interest rates and __________ quantity demanded of loanable funds.Select the correct answer below:
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