Chapter 4: "Q.1" (page 103)
In the labor market, what causes a movement along the demand curve? What causes a shift in the demand curve?
Changeswithin the wage rate (the price of labor) that the causes of a movement along the demand curve
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Would usury laws help or hinder the resolution of a shortage in financial markets?
If a usury law limits interest rates to no more than 35%, what would the likely impact be on the amount of loans made and interest rates paid
Table 4.6 shows the amount of savings and
borrowing in a market for loans to purchase homes, measured in millions of dollars, at various interest rates. What is the equilibrium interest rate and quantity in the capital financial market? How can you tell? Now, imagine that because of a shift in the perceptions of foreign investors, the supply curve shifts so that there will be $10 million less supplied at every interest rate. Calculate the new equilibrium interest rate and quantity, and explain why the direction of the interest rate shift makes intuitive sense.
| Interest Rate | Qs | Qd |
| 5% | 130 | 170 |
| 6% | 135 | 150 |
| 7% | 140 | 140 |
| 8% | 145 | 135 |
| 9% | 150 | 125 |
| 10% | 155 | 110 |
Are households demanders or suppliers in the goods market? Are firms demanders or suppliers in the goods market? What about the labor market and the financial market?
In the labor market, what causes a movement along the supply curve? What causes a shift in the supply curve?
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