the economy of marthaland had a balanced budget, but an economic boom increased tax revenues. which of the…
the economy of marthaland had a balanced budget, but an economic boom increased tax revenues. which of the following should be used to show the effect of the increase in tax revenues on interest rates in marthaland? choose 1 answer: a the production possibilities curve b the money market c the aggregate demand - aggregate supply, or ad - as, model d the market for loanable funds e the circular flow diagram
Answer
Brief Explanations:
The market for loanable funds shows the relationship between the supply and demand of loanable funds and how interest - rates are determined. An increase in tax revenues can affect the supply of loanable funds (e.g., if the government saves more of the extra revenue), which in turn impacts interest rates. The production possibilities curve shows the trade - offs in production, the money market focuses on the supply and demand for money and interest rates related to liquidity, the AD - AS model shows overall economic output and price levels, and the circular flow diagram shows the flow of goods, services, and money in an economy.
Answer:
D. The market for loanable funds