Exam 7: Finance, Saving, and Investment

When the actual real interest rate is less than the equilibrium real interest rate,

A rise in the real interest rate

"When there is a shortage of loanable funds, the real interest rate will increase." Explain whether the previous statement is correct or not.

The the expected profit from new capital, the greater is the .

The tendency for private saving to increase in response to growing government deficits is known as the

An increase in the real interest rate results in a

-Use the information in the table above to calculate the value of private saving.

If the real interest rate is above the equilibrium real interest rate,

During the financial crisis in 2007 and 2008, financial institutions believed that default risks were higher. As a result, there was in the supply of loanable funds and a in the real interest rate.

Suppose the United States spends more on foreign goods and services than foreigners spend on our goods and services and the United States sells no foreign assets. Then the

-In the above figure, the demand for loanable funds curve is drawn for the average expected profit. If the real interest rate is constant at 6 percent and and the expected profit rises, the amount of loanable funds demanded will be

As the _ interest rate increases, the quantity of loanable funds demanded .

There is a positive relationship between the demand for loanable funds and the real interest rate.

How does expected future income affect saving supply?

The funds used to buy and operate physical capital are

The expected profit from an investment will change with

A fall in the real interest rate

Which of the following is true regarding the effect expected future income has on saving? I. As expected future income increases, saving increases. II. Young people typically save very little. III. Middle aged people, earning higher incomes, are not very big savers.

If our exports are $2.2 billion and our imports are $2.7 billion,

If net taxes exceed government expenditures, the government sector has a budget and government saving is _.