In the loanable funds market Multiple Choice demand for loanable funds shifts right if the interost rate falls. supply is vertical because loanable funds are fixed in any relevant time frame. demand is downward sloping because lower interest rates make more capital projects profitable. demand for loannble funds shifts right in the interest rate rises.
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- How is optimal investment for the firm affected by an increase in the current capital stock? A. The demand for investment goods will increase along the optimal investment schedule. B. The optimal investment schedule shifts to the right. For each level of investment, the future marginal product of capital will increase. C. The demand for investment goods will decrease along the optimal investment schedule. D. The optimal investment schedule shifts to the left. For each level of investment, the future marginal product of capital will decrease.3. Supply and demand for loanable funds The following graph shows the market for loanable funds in a closed economy. The upward-sloping orange line represents the supply of loanable funds, and the downward-sloping blue line represents the demand for loanable funds. Supply Demand 100 200 300 400 500 LOANABLE FUNDS (Billions of dollars) A INTEREST RATE (Percent) m 0 0 600The following graph shows the market for loanable funds in a closed economy. The upward-sloping orange line represents the supply of loanable funds, and the downward-sloping blue line represents the demand for loanable funds. 8 7 Supply 6 400, 4 Demand 100 200 300 400 500 600 700 800 LOANABLE FUNDS (Billions of dollars) INTEREST RATE (Percent)
- The following graph shows the market for loanable funds in a closed economy. The upward-sloping orange line represents the supply of loanable funds, and the downward-sloping blue line represents the demand for loanable funds. INTEREST RATE (Percent) 10 8 O 0 Supply 100 200 300 400 500 600 Demand 700 800 LOANABLE FUNDS (Billions of dollars) 900 1000 ?INTEREST RATE (Percent) 12 11 10 9 co 5 4 3 2 1 0 Supply Demand 0 100 200 300 400 500 600 700 800 900 1000 1100 1200 LOANABLE FUNDS (Billions of dollars) ? Investment is the source of the supply of loanable funds. As the interest rate falls, the quantity of loanable funds supplied decreases Suppose the interest rate is 5.5%. Based on the previous graph, the quantity of loanable funds supplied is greater than the quantity of loans demanded, resulting in a surplus of loanable funds. This would encourage lenders to lower the interest rates they charge, thereby decreasing the quantity of loanable funds supplied and increasing the quantity of loanable funds demanded, moving the market toward the equilibrium interest rate of 5%Chapter 17: The Theory of Investment Question: The work in process motive for holding inventories suggests that: P 4. firms hold inventories in order to produce more output. when a product is only partly completed, its components are counted as part of the firm's inventory. when sales are low, firms produce more than they sell and put the extra goods in inventories. Od. firms cannot produce more because of higher cost of production. P firms hold inventories to avoid losing sales.
- 4. Supply and demand for loanable funds The following graph shows the market for loanable funds in a closed economy. The upward-sloping orange line represents the supply of loanable funds, and the downward-sloping blue line represents the demand for loanable funds. INTEREST RATE (Percent) 9 8 0 0 100 Supply Demand 200 300 400 500 600 700 800 900 1000 LOANABLE FUNDS (Billions of dollars)7.18 You are the chief learning officer for your organization and are tasked with evaluating a recent training program. What is the easiest way to accomplish this task? O Measure the return on investment. O Assess the transfer of learned skills to the job. O Test participants' knowledge and skills before and after the program OAssess participants' reactions to it.Question 20 The market for loanable funds Real interest | rate (per cent) Equilibrium interest rate Demand for loanable funds Equilibrium quantity of loanable funds Loanable funds (dollars) per year) Refer to the above diagram to answer the following question. The supply of loanable funds has a O negative; greater; lesser O negative; lesser; greater O positive; greater; greater O positive; lesser; lesser Supply of loanable funds slope because the greater the interest rate, the the reward for savings, and the the quantity of loanable funds supplied.
- Assume an economy where there are two producers: a wheat producer and a bread producer. In agiven year, the wheat producer grows 3 million tonnes of wheat, of which 2.5 million tonnes aresold to the bread producer at $30 per bushel, and 0.5 million tonnes are stored by the wheatproducer to use as seed for next years crop. The bread producer produces and sells 100 millionloaves of bread to consumers for $3.50 per loaf. Determine GDP in this economy during this yearusing the product and expenditure approaches.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 marketA firm is currently producing such that: MPL = 30 W = 10 MPK = 20 To minimize the cost of production, this firm should: a. Use more labor and less capital which will (likely) decrease the MPL b. Use more labor and less capital which will (likely) increase the MPL C. Use less labor and more capital which will (likely) decrease the MPK Od. Use less labor and more capital which will (likely) increase the MPK v = 20