Exam 7: Finance, Saving, and Investment

The table below shows data for the U.S. Between 2014 and 2015 the real interest rate ________ and caused a ________ the demand for loanable funds curve.

The real interest rate is 4 percent a year. When the inflation rate is zero, the nominal interest rate is approximately ________ percent a year; and when the inflation rate is 2 percent a year, the nominal interest rate is approximately ________ percent a year.

The real interest rate has a positive relationship with the supply of loanable funds.

Which of the following have a positive relationship with household saving? I.the real interest rate II.disposable income III.expected future income

According to the Bureau of Economic Analysis, household disposable income fell by 0.3 percent of August, 2012. If all else remains the same, what is the likely impact of this fall on the real interest rate?

As the purchasing power of wealth increases, saving decreases.

Net investment equals

If the economy's capital stock increases over time

The greater a household's ________ the less is its saving.

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.

National saving is defined as the amount of

A movement downward along the demand for loanable funds curve occurs when

If the real interest rate increases from 3 percent to 5 percent

In the loanable funds market, what variable changes to eliminate a shortage of loanable funds and how is the shortage eliminated?

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

In 2008, Australia had a government budget surplus of $21.7 billion. This budget surplus shifts the demand for loanable funds curve ________

If the government begins to run a larger budget deficits, then assuming there is no Ricardo-Barro effect, the demand for loanable funds ________ and 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.

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

-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 the expected profit falls, the amount of loanable funds demanded will be