In a large open economy, why is the supply of loanable funds upward sloping?
a. A lower interest rate makes borrowing more expensive.
b.A lower real interest rate encourages people to save.
c. A higher real interest rate encourages people to save.
d. A higher real interest rate discourages domestic consumers from buying foreign assets.
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Related questions
Suppose the U.S offered a tax credit for firms that built new factories in the U.S. Then __________
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a |
The demand for loanable funds would shift rightward, initially creating a surplus of loanable funds at the original interest rate. |
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b |
The demand for loanable funds would shift right, initially creating a shortage of loanable funds at the original interest rate. |
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c |
The supply of loanable funds would shift rightward, initially creating a surplus of loanable funds at the original interest rate. |
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d |
The supply of loanable funds would shift rightward, initially creating a shortage of loanable funds at the original interest rate. |
multiple_choice63469124Question 2 (1 point)
Which of the following statements are correct?
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a |
A general, persistent decline in stock prices may signal that the economy is about to enter a boom period because people will be able to buy stock for less money. |
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b |
A general, persistent decline in stock prices may signal that the economy is about to enter a recession because low stock prices may mean that people are expecting low corporate profits. |
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c |
A general, persistent decline in stock prices may signal that the economy is about to enter a recession because low stock prices mean that corporations have had low profits in the past. |
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d |
Expectations about the business cycle have no impact on stock prices. |
multiple_choice63469064Question 3 (1 point)
Suppose that a new government is elected in Lawrencia. The new government takes steps toward improving the court system and reducing government corruption. The citizens of Lawrence find these efforts credible and outsiders believe these changes will be effective and long-lasting. These changes will probably __________
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a |
Raise real GDP per person and productivity in Lawrencia. |
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b |
Raise real GDP per person but not productivity in Lawrencia. |
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c |
Raise productivity but not real GDP per person in Lawrencia. |
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d |
Raise neither productivity nor real GDP per person in Lawrencia. |
multiple_choice63469078Question 4 (1 point)
Other things the same, a country that increases its savings rate increases __________
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a |
Its future productivity and future real GDP. |
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b |
Neither its future productivity nor future real GDP. |
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c |
Its future productivity but not its future real GDP. |
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d |
Its future real GDP but not its future productivity. |
