Exam 7: Finance, Saving, and Investment

The University of Central Florida (UCF) wanted "to create a town center where students can live,eat,study and revel in college traditions like football." In addition,the university needed funding to build dorms that would house 2000 students.UCF was able to secure financing by promising to pay a lender a specific amount of money on specific dates. This transaction takes place in the ________ market for ________ capital. www.sptimes.com 10/14/2007

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

A small country is a net foreign borrower and its domestic demand for loanable funds increases.Consequently,the equilibrium quantity of loanable funds used in the country ________ and the country's foreign borrowing ________.

France's government is running a budget deficit. With no Ricardo-Barro effect,which of the following events will occur? I. The supply curve of loanable funds will shift leftward. II. A higher real interest rate crowds out investment. III. Saving increases.

What are the factors that change investment demand and shift the demand for loanable funds curve?

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

When the inflation rate is negative,the

If the real interest rate rises,people

In November 2008,Grand Canyon Education chose to finance expansion by offering ownership in its firm. These owners of Grand Canyon Education the are entitled to a share of the firm's profits. This financing is an example of ________.

Households will choose to save more if

In 2008,the financial and housing crisis caused firms to decrease their profit expectations. As a result,there was a ________ in the ________ for loanable funds curve.

-In the above figure,the initial supply of loanable funds curve is SLF₀ and the initial demand for loanable funds curve is DLF₀.An economic expansion that raises disposable income and the expected profit would

If the economy's capital stock decreases over time,

A decrease in the government budget deficit decreases the ________ loanable funds and an increase in the government budget surplus increases the ________ loanable funds.

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

People know that the inflation rate will increase from 3 percent to 5 percent.As a result

The total amount spent on new capital in a time period is equal to

Suppose the current real interest rate is 4 percent and the equilibrium real interest rate is 3 percent.Then

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.

In January,suppose that a share of stock in Meyer,Inc.had a price of $50 and that each share entitled its owner to $2 of Meyer,Inc.'s profit. During the year,the price of a share of Meyer's stock rose to $100. The interest rate paid on the share in January was ________ percent.