Analyze the impacts of the economy entering a time of expansion (i.e. "good times") on the market for loanble funds. (Assume that expectations about the future don't change.) Because of the expansion, equilibrium interest rates will and the equilibrium quantity of loanable funds will O decrease ; rise, fall, or not change (ambiguous effect) O increase; decrease O increase ; rise, fall, or not change (ambiguous effect) O rise, fall, or not change (ambiguous effect) ; increase O rise, fall, or not change (ambiguous effect) ; decrease

Analyze the impacts of the economy entering a time of expansion (i.e. "good times") on the market for loanble funds. (Assume that expectations about the future don't change.) Because of the expansion, equilibrium interest rates will and the equilibrium quantity of loanable funds will O decrease ; rise, fall, or not change (ambiguous effect) O increase; decrease O increase ; rise, fall, or not change (ambiguous effect) O rise, fall, or not change (ambiguous effect) ; increase O rise, fall, or not change (ambiguous effect) ; decrease

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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If there is a surplus of loanable funds, then 1) the quantity demanded is greater than the quantity supplied and the interest rate will rise. 2) the quantity demanded is greater than the quantity supplied and the interest rate will fal. O 3) the quantity supplied is greater than the quantity demanded and the interest rate will rise. 4) the quantity supplied is greater than the quantity demanded and the interest rate will fall.
Why would the economics discipline assume that generally people have a positive rate of time preference? (mark all that apply) O Future moncy and present money are the same: a dollar is the same today as it is one year from now. The future is uncertain, so consumers value money today more than money in the future. O Young consumers generally have lower income than they expect to have in the future, so maney today is more valuable to them than money in the future. O Money/resouroes can be used to innovate and create more value in the future (investment by businesses). Young consumers generally prefer money in the future than money in the present because they are young and have many years ahead of them.
Which of the following would lead to an increase in an individual's wealth? i. a person makes the last payment on their car loan ii. a person sells their car for $3,000 iii. a person bought stock for $500 and one year later it is worth $550 iv. a person uses money from their savings account to buy a new car Oi i, ii, and iii all of these lead to an increase in wealth O i and iii
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E) There is a business cycle expansion, so both supply and demand shifts. After the shift, thenew demand curve is given by: D = 4000 + X − 2P, whereas the new supply curve is S =2P+ 200. For which values of X will the interest increase/decrease? Which values of X arein line with empirical data?
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Who benefits from an increase in interest rates? O people who are borrowing money no one O people who are saving money O everyone Previous Next ASUS f6 19 & 5 8 近

Macmillan Learning Figure: Investment Projects Project F G H J K L M Rate of return on investment 20% 18 16 14 12 10 8 6 Cost of investment $ 500 300 1,000 200 2,000 1,500 1,200 800 Use Table: Investment Projects. If the market interest rate is 17%, the amount of investment demanded is: O $2,000. O $1,000. O $800. O $200.
Figure 10-6 Real interest rate 6% 5 4 3 2 1 0 30 Select one: O O O O 60 90 _____ 120 150 a. supply; rise; decreasing; increasing b. supply; fall; increasing; decreasing c. demand; fall; decreasing; decreasing d. demand; rise; increasing; decreasing 180 will Refer to Figure 10-6. The loanable funds market is in equilibrium, as shown in the figure above. As a result of an increase in the government budget deficit, the thereby the equilibrium real interest rate and the equilibrium quantity of loanable funds. S Quantity of loanable funds (millions of dollars) for loanable funds
Which of the following would ↑ the Qd of LF? Select one: O A. expected profit decreases. B. the real interest rate rises. O C. the real interest rate falls. D. the supply of loanable funds decreases. E. wealth increases. Clear my choice
Figure 32-1 percent 8 10 20 30 40 50 60 70 $billions Refer to Figure 32-1. In the Figure shown, if the real interest rate is 6 percent, the quantity of loanable funds demanded is O A. $20 billion, and the quantity supplied is $40 billion. O B. $20 billion, and the quantity supplied is $60 billion. O C. $60 billion, and the quantity supplied is $20 billion. O D. $60 billion, and the quantity supplied is $40 billion.
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