--%>
Assignment Help - homework help

Cause-and-effect chain

Mark out the cause-and-effect chain through which refinancing and financing of the public debt might influence real interest rates, the stock of capital, private investment and economic development. How might investment in public capital & complementarities among public & private capital alter the outcome of the cause-effect chain?

E

Expert

Verified

Cause and effect chain:  Government borrowing to finance the debt competes along with private borrowing & drives up the interest rate; the higher interest rate causes a decline in private capital and economic growth slowdown.

Though, if public investment complements private investment, private borrowers might be ready to pay higher rates for positive growth chance.  Productivity and economic growth could increase.

 

   Related Questions in Finance Basics

  • Q : Define Expenditure Expenditure : The

    Expenditure: The expenditures reported on a department’s annual financial reports and “past year” budget documents comprises of amounts paid and accruals (comprising encumbrances and payables) for obligations made for the fiscal year

    		•
  • Q : What is Victim Compensation and

    Victim Compensation and Government Claims Board, California: It is an administrative body in state government exercising quasi-judicial powers (that is, power to make rules and regulations) to set up an orderly procedure by which the Legislature will

    		•
  • Q : Explain Public Service Enterprise Fund

    Public Service Enterprise Funds: For legal base accounting purposes, the fund categorization which identifies funds utilized to account for the transactions of self-supporting enterprises which render goods or services for a direct charge to user (tha

    		•
  • Q : Analysis on Financial Manangement

    Questions 1: (1) Your coin collection contains 40 1957 silver dollars. If your grandparents purchased them for their face value when they were new, how much will your collection be worth when you retire in 2040, assuming they appreciate at a 10 percent annual rate? <

    		•
  • Q : Aggregate demand or aggregate supply

    Normal 0 false false

  • Q : Association of net present value to

    Normal 0 false false

    		•
  • Q : Describe the notion of political

    Normal 0 false false

  • Q : Price Earning ratio Define the term

    Define the term Price Earning ratio and how it is calculated?

    		•
  • Q : Describe NAFTA Normal 0 false false

    Normal 0 false false

  • Q : Value $100 is received at the beginning

    $100 is received at the beginning of year 1, $200 is received at the beginning of year 2, and $300 is received at the beginning of year 3. If these cash flows are deposited at 12 percent, their combined future value at the end of year 3 is

    		•