The idea that people like to borrow more money at lower real interest rates and prefer to borrow less at higher real interest rates results in a(n) A. Downward sloping demand curve in the labor market B. Downward sloping curve in the loanable funds market C. Upward sloping supply curve in the loanable funds market

The idea that people like to borrow more money at lower real interest rates and prefer to borrow less at higher real interest rates results in a(n) A. Downward sloping demand curve in the labor market B. Downward sloping curve in the loanable funds market C. Upward sloping supply curve in the loanable funds market

Economics (MindTap Course List)

13th Edition

ISBN:9781337617383

Author:Roger A. Arnold

Publisher:Roger A. Arnold

Chapter29: Interest, Rent, And Profit

Section: Chapter Questions

Problem 3QP

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Consider the following figure which shows the loanable funds market (where SLF is the supply of loanable funds and DLF is the demand for loanable funds). If the real interest rate is 9 per cent, then a. there is a surplus in the loanable funds market b. there is a shortage in the loanable funds market. c. the demand for loanable funds curve will shift rightward. d. there will be a leftward shift in the demand for loanable funds curve.
When the interest rate decreases, a)people would want to lend more, making the supply of loanable funds increase. b)people would want to lend less, making the supply of loanable funds decrease. c)people would want to lend more, making the quantity of loanable funds supplied increase. d)people would want to lend less, making the quantity of loanable funds supplied decrease.
The source of the _ for loanable funds is saving. demand market supply interest rate The source of the _ for loanable funds is investment. supply interest rate demand market The _ represents the price of a loan. catch-up effect rate of inflation loan term interest rate
#18. What would happen in the market for loanable funds if the government were to increase the tax on interest income? a The supply of loanable funds would shift right. b The demand for loanable funds would shift right. c The supply of loanable funds would shift left. d The demand for loanable funds would shift left.
Consider the market for loanable fund. Answer the question below. 2.a. The market equilibrium interest rate is 3%. But current interest rate is 4%. Then, is the supply of loanable fund larger, smaller or equal to the demand for loanable fund? 2.b. People’s preference for saving increased. Answer if the equilibrium interest rate and investment would increase, decrease, or would not change. Interest rate: Investment:
Please answer the given four questions related to the market for loanable funds. What effect will an increase in interest rates have on the quantity of loanable funds supplied? There will be no change in quantity supplied. Quantity supplied will decrease. Some lenders will offer more whereas others offer less. Quantity supplied will increase. As interest rate decreases, what happens to the quantity of loanable funds demanded? Some borrowers will demand more funds whereas others will demand less. There will be no change in quantity demanded. Quantity demanded will increase. Quantity demanded will decrease. Which of the terms acts as the "price" in the market for loanable funds? demand capital supply If the projected rate of return for a project is less than the interest rate for a loan that is necessary to complete the project, how will the borrowing business act? The business will proceed anyway, knowing that the return is only an estimate. The…
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What is true about equilibrium in the market for loanable funds? A. Savings = gross domestic product (GDP) B. Investment = interest rate C. Interest rate = inflation D. Investment = savings
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 a. Interest rate will (Please write one word either increase or decrease in the blank). b. Quantity of loanable funds will (Please write one word either increase or decrease in the blank) Now assume, the parliament passed a tax reform aimed at making investment more attractive-for instance, by instituting an investment tax credit. An investment tax credit gives a tax advantage to any firm building a new factory or buying a new piece of equipment What is the effect of this policy on the market for loanable finds c. Interest rate will (Please write one word either increase or decrease in the blank). d. Quantity of loanable funds will (Please write one word either increase or decrease in the blank)
K Consider the graph to answer the following questions: a. The shift from S, to S₂ represents in the supply of loanable funds. b. With the shift in supply, the equilibrium quantity of loanable funds c. With the change in the equilibrium quantity of loanable funds, the quantity of saving and the quantity of investment ▼ A CI Real Interest Rate Market for Loanable Funds L₂ L1 Loanable Funds ($ per year) S₁ Q
Household time preferences increase (people become less patient). Which of the following graphs correctly shows how the loanable funds market changes? Interest rate Loanable funds market Interest rate Savings/Investments Loanable funds market ☆ Interest rate Loanable funds market # Savings/Investments Savings/Investments Interest rate Loanable funds market Savings/Investments
Which of the following reasons could cause the demand curve for loanable funds to shift to the right from DLF to D¹LF in the figure? Wage $11 8 X 3400 2700 D 4500 Quantity of labor The economy is expected to boom, thereby increasing investment returns. O Larger investment projects with potentially higher returns get funded. Falling interest rates make it less expensive for firms to borrow. Rising interest rates make it more attractive for savers to save.