Exam 4: Determining Interest Rates

Suppose Ireland is a small open economy that is neither a net international borrower or international lender. Many countries increase their savings resulting in a lower world real interest rate. Make use of a graph of the loanable funds market for a small open economy to show the impact this has on Ireland's international financial position.

Consider an open economy that is a net borrower (like the United States). What would be the impact of a shift to a closed economy?

The demand curve for loanable funds slopes down because

An investor who desired the ability to have quick and easy access to cash would prefer to hold which type of asset?

During 2000, the government repurchased $30 billion in U.S. Treasury bonds outstanding. This was the first time this had been done since the administration of Herbert Hoover in the early 1930s. Analyze the impact of this repurchase on the bond market.

Studies by economists suggest that

In the bond market, the buyer is considered to be

Which of the following can best be characterized as a "Black Swan" event?

The supply curve for bonds would be shifted to the left by

If a small open economy reduces its budget deficit, the result will be:

Which is the best example of idiosyncratic risk?

Which of the following statements is correct?

In the market for loanable funds, the seller is considered to be

The supply curve for bonds would be shifted to the right by

The equilibrium real interest rate in Belgium will be

Why do CDs have lower rates of return than stocks?

A portfolio is a

If the expected gains on stocks rise, while the expected returns on bonds do not change, then

Suppose there's an 80% chance of a stock rising by 20% and a 20% chance of it falling by 40%. Which type of investor would prefer an investment with a guaranteed return of 5%?

If there is an excess supply of bonds at a given price of bonds, then