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What happens to consumer and business spending when the interest rate goes up?
Wiki User
∙ 11y ago
When the interest rate goes up consumer would prefer to hold less money and save more whereas business spending would face a halt since capital infusion becomes costlier.
Wiki User
∙ 11y ago
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What happens to the expenses involed in complying with government regulations?
passed on to the consumer
What is crowing-out effect of deficit spending?
The crowding out effect is an idea/theory of macroeconomics. Generally, it states that an increase in govt. spending that produces a deficit (an expansionary fiscal policy), will result in recessionary effects. When governments run a deficit, they have to borrow from the loanable funds market, in order to get the money to pay for things. By increasing the demand for loanable funds, they in turn increase the real interest rates for these loans. Because of higher interest rates, businesses will not likely invest as much, thus they are being "crowded out." So although the G component of aggregate spending (C + Ig + G + Xn) increased, the Ig part (business investment) will decrease. Economists debate over how big of an impact the crowding effect has, but all typically agree it happens to some degree.
What happens with an increase in deficit spending?
the demand for loanable funds will increase, interest rates will increase
Which term explains what happens to the national economy when household spending exceeds savings?
prosperity
What happens to consumer and producer surplus when the sale of a good is taxed?
They both decrease.
What happens to consumer and businesses spending when the interest rates go up?
They both increase
What happens to consumers and businesses spending when interest rates goes up?
When the interest rate goes up consumer would prefer to hold less money and save more whereas business spending would face a halt since capital infusion becomes costlier.
What are the categories of operations under E-Commerce?
E-commerce is the trading and selling that happens over the internet. These include business to business, consumer to consumer, and business to consumer.
When real GDP is increasing what happens to jobs and consumers spending?
Consumer spending is 2/3rds of GDP, so definitionally if GDP is rising it is highly likely that consumption is increasing which would spur job creation. Net-net: 1. Consumer spending up; 2. Jobs up.
What happens to glucose as it moves from consumer to consumer?
people die get over it!
What happens to taxes when the government increases spending?
they go up
What happens to the expenses involed in complying with government regulations?
passed on to the consumer
What is crowing-out effect of deficit spending?
The crowding out effect is an idea/theory of macroeconomics. Generally, it states that an increase in govt. spending that produces a deficit (an expansionary fiscal policy), will result in recessionary effects. When governments run a deficit, they have to borrow from the loanable funds market, in order to get the money to pay for things. By increasing the demand for loanable funds, they in turn increase the real interest rates for these loans. Because of higher interest rates, businesses will not likely invest as much, thus they are being "crowded out." So although the G component of aggregate spending (C + Ig + G + Xn) increased, the Ig part (business investment) will decrease. Economists debate over how big of an impact the crowding effect has, but all typically agree it happens to some degree.
What happens with an increase in deficit spending?
the demand for loanable funds will increase, interest rates will increase
What happens if the consumer price index is low?
Stagflation will occur
What happens when the government spends more than its annual revenue?
Deficit Spending
What happens after the car is sold and the company wants to collect and what are the rights of the consumer in Georgia?
The consumer has the "right" to pay the debt he contracted.
