Exam 7: Finance, Saving, and Investment

The supply of loanable funds curve shifts leftward if the real interest rate rises.

Initially the nominal interest rate is 8 percent and the inflation rate is 5 percent. People know that the inflation rate increases to 10 percent. What is the new nominal interest rate?

-In the above figure, the economy is at point a on the initial supply of loanable funds curve SLF₀. What happens if the real interest rate rises?

The Restoring American Financial Stability Act of 2010

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

If a bankʹs net worth is negative, then the bank definitely is

The Acme Stereo Company had a capital stock of $24 million at the beginning of the year. At the end of the year, the firm had a capital stock of $20 million. Thus its

If you lend a dollar for a year and at the end of the year the price level has risen by 10 percent,

If households believe their incomes will fall in the future, the result is a

A rise in the real interest rate

The term capital, as used in macroeconomics, refers to

The capital stock increases whenever

In 2008, Germany had a budget deficit of 37 billion euros. This will budget deficit the supply of loanable funds and the real interest rate.

Gross investment

At the beginning of the year, your wealth is $10,000. During the year, you have an income of $80,000 and you spend $90,000 on consumption. You pay no taxes. Your wealth at the end of the year is

An increase in disposable income shifts the supply of loanable funds curve

In the absence of a Ricardo-Barro effect, a government budget deficit the demand for loanable funds, the real interest rate, and investment.

The interest rate approximately equals the interest rate minus .

If foreigners spend more on U.S.-made goods and services than we spend on theirs,

National saving is defined as the amount of