13 Because firms are the primaryO a) demanders of loanable funds, they must borrow from households or foreignentities.O b) suppliers of loanable funds, they must lend to the government.Oc) demanders of loanable funds, they must borrow from the government.Od) suppliers of loanable funds, they must lend to households.agents of usury, they must be "reined in" by the people.

Loanable funds:- The loanable funds hypothesis can be explained as a market interest rate concept.…

Because firms are the primary demanders of loanable funds, they must borrow from households or foreign entities. O b) suppliers of loanable funds, they must lend to the government. Od demanders of loanable funds, they must borrow from the government. O d) suppliers of loanable funds, they must lend to households. agents of usury, they must be "reined in" by the people.

Because firms are the primary demanders of loanable funds, they must borrow from households or foreign entities. O b) suppliers of loanable funds, they must lend to the government. Od demanders of loanable funds, they must borrow from the government. O d) suppliers of loanable funds, they must lend to households. agents of usury, they must be "reined in" by the people.

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter19: The Macroeconomic Perspective

Section: Chapter Questions

Problem 29P: The prime interest rate is the rate that banks charge their best customers. Based on the nominal...

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If new technology makes existing capital obsolete and labour less productive, what are the effects in the loanable funds market according to some economists? Please choose all answers that apply. O A. A decrease in the real interest rate results. O B. The quantity supplied of loanable funds decreases. O c. Investment decreases. O D. An increase in the real interest rate results. OE. The demand for loanable funds increases.
The following figure plots real interest rate against quantity of credit. Real interest rate (%) S, A B. S, D, D, Quantity of credit ($) Refer to the figure above. Assume that the loanable funds market initially is in equilibrium at point D. What has to be true for the new equilibrium to be at point A? O The inflation rate must increase. Companies' or individuals' savings must decrease. O Companies' or individuals' investments must decrease. O The demand of credit must not shift.
Suppose the government runs fewer budget deficit and there is a decrease in the average household income. Then, O The new EQ quantity of loanable funds would be indeterminate, , but the new EQ interest rate would increase. O The new EQ quantity of loanable funds would decrease, but the new EQ interest rate would be indeterminate. O The new EQ quantity of loanable funds would be indeterminate, , but the new EQ interest rate would decrease. The new EQ quantity of loanable funds would be indeterminate, but the new EQ interest rate would increase. The new EQ quantity of loanable funds would increase, but the new EQ interest rate would be indeterminate.
This refers to an income instrument that represents a loan by an investor to a borrower. O A. Stock О В. Вond O C. Inflation O D. Interest
Consider a loanable funds market of Pakistan. Suppose, if government want to implement the policy to provide incentives on savings by allowing people to shield their savings by opening Retirement Accounts with commercial banks. What is the effect of this policy on the market for loanable finds Interest rate will Quantity of loanable funds will
Suppose the market for loanable funds is currently in equilibrium. Which of the following factors will cause an increase in the interest rate? Select one: O a. An increase in the household saving rate O b. An expansionary monetary policy Oc. An increase in business confidence O d. A decrease in government budget deficits Travis buys a 20-year, $10,000 US Treasury bond with a coupon rate of 5%. After three years, he has some unexpected expenses and decides to sell the bond. In which market will Travis sell his bond? Select one: O a. The secondary bond market O b. The primary bond market O c. The Treasury bond market Od. The T-bond market
Interest Rate 0 Multiple Choice O O A O S₁ BC Quantity Refer to the diagram. Suppose that the demand for loanable funds is D₁ and the supply of loanable funds initially is S₁. If the supply of loanable funds increases to So, the equilibrium quantity of funds borrowed will increase from E to F. increase from A to B. increase from B to C. So decrease from G to F. Do D₁
The prime interest rate is the rate that banks charge their best customers. Based on the nominal interest rates and inflation rates in Table 19.10, in which of the years would it have been best to be a lender? Based on the nominal interest rates and inflation rates in Table 19.10, in which of the years given would it have been best to be a borrower?
Which one of the following is a characteristic of the service sector? O Intangible products O Little customer contact O Tangible products O Standardized products
If the government instituted an investment tax credit, then which of the following would be higher in equilibrium? Use the loanable funds model to answer. O a. Neither the saving nor the interest rate O b. The saving but not the interest rate O c. The saving and the interest rate O d. The interest rate but not the saving
Figure 18-11 The Market for Capital Refer to Figure 18-11. What is measured on the vertical axis of the graph? O a. the rate of technological progress b. wages paid to workers in markets where capital goods are produced c wages paid to workers in markets where capital goods are not produced d the rental price of capital Supply Demand Quantity of Capital
A government budget deficit occurs, which The real interest rate O A. decreases the supply of loanable funds; falls O B. decreases the supply of loanable funds; rises C. decreases the demand for loanable funds; falls O D. increases the demand for loanable funds; rises