Consider the market for loanable funds in Japan. After the earthquake in 2011, infrastructure like dams and bridges were destroyed. Many families also have their houses wiped out by the tsunami, and family reconstruction involved a huge expense.
Required:
a. Would the households’ supply of loanable funds increase after the earthquake? Explain.
b. Would the firms’ demand for loanable funds increase after the earthquake? Explain.
Answers: 1
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Consider the market for loanable funds in Japan. After the earthquake in 2011, infrastructure like d...
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