Exam 7: Finance, Saving, and Investment

The term "crowding out" relates to the decrease in

If the government has a budget deficit, crowding out might occur. Crowding out leads to all of the following EXCEPT

Suppose the market for loanable funds is in equilibrium. If disposable income increases, the equilibrium real interest rate ________ and the quantity of loanable funds ________.

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

If the nominal interest rate is 11 percent and the inflation rate is 9 percent, then the real interest rate is approximately

An increase in the real interest rate ________ the quantity of loanable funds supplied and ________ the quantity of loanable funds demanded.

Which of the following is CORRECT?

Which of the following is TRUE? I.As the real interest rate increases, people increase the quantity they save. II.The supply of loanable funds curve is downward sloping. III.As disposable income increases, the supply of loanable funds curve becomes steeper.

When the inflation rate is negative, the

If the quantity of loanable funds supplied exceeds the quantity of loanable funds demanded, then ________.

-In the above figure, a decrease in the expected profit will result in a movement from point E to

-In the above figure, an increase in the expected profit will result in a movement from point E to

Greater optimism about the expected profits from investment projects

Which of the following is TRUE regarding the real interest rate? I.The real interest rate is the opportunity cost of borrowed funds. II.The real interest rate equals the nominal interest rate adjusted for inflation.

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

What is the relationship between the real interest rate, the supply of loanable funds and the demand for loanable funds?

Approximately, the real interest rate ________ the inflation rate ________ the nominal interest rate.

If the real interest rate is below the equilibrium real interest rate

If Ann's disposable income increases, her saving decreases.

Suppose that you took out a $1000 loan in January and had to pay $75 in annual interest. During the year, inflation was 6 percent. Which of the following statements is CORRECT?