If interest rates in the economy rise over time this is: O Good for lenders but bad for borrowers Good for borrowers but bad for lenders Good for lenders and borrowers Bad for lenders and borrowers
Q: Question 1 Not yet answered Points out of 1.00 Pag ouestion Holding other factors constant, if…
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A: The answer is - c. All of the answers are correct
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A: In the money market, the equilibrium interest rate is determined by the intersection of the money…
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A: The nominal interest rate is approximately equal to the real interest rate plus the inflation rate…
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A: 1. The answer is - c. c1
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A: Direct Finance is referred to as the situation in which transaction between two parties is done…
Q: Q. 18 Dave deposits $2000 into the bank as deposits in 2016. The bank promises him a nominal…
A: Deposited - $2000 Nominal Interest rate = 5% = 0.05 Goods: 2 can of Coca-Cola 5 hamburgers
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A: The money demand arises as people desire to hold money in the form of cash or bank deposits. People…
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A: The term "capital markets" refers to places where money is exchanged between those who supply…
Q: Which of the following is correct? Select one: O a. Inflation encourages large holdings of money by…
A: Inflation is the increase in average price level of all goods and services.
Q: 7. When is it good for banks to give out "sub-prime" loans? * when the stock market is going up O…
A: In the banking sector, sub-prime loans refers to the loan provided to the people with low credit…
Q: Explain the connection between price of financial assets and its interest rate? Que2: Explain…
A: Solution: 1) Financial Assets: These are those assets that help to give benefit in future for a long…
Q: The discount rate refers to the prime interest rate. O True O False
A: Discount rate is the rate at which central bank issues loans to its banks.
Q: If the inflation rate is 2 percent, interest rates are 8 percent, and GDP is growing at 3 percent…
A: Inflation rate is the rate at which price level is increasing.
Q: A government budget deficit occurs, which The real interest rate O A. decreases the supply of…
A: When government faces budget deficit, its expenditure exceeds its revenue. Inorder to meet that…
Q: he eco
A: Government expenditure or spending tends to includes all investment, government consumption and also…
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Q: Explain, with the aid of a graph, the effect of an interest rate decrease on the (7) money market…
A: Money market consists of demand for money and money supply. Intersection of these two curves gives…
Q: .The marginal product of labor (MPL) is given by the
A: Marginal Product of Labour is the additional unit of output produce by employing additional labour…
Q: Janet has some money set aside for the purchase of a new house. Her friend, Rachel, has some credit…
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Q: In this hypothetical economy, there are two consumers living over two periods of life. Ann's incomes…
A: Answer: For Ann, Consumption in period 1 = c1 = 50000 , income = y1 = 50000 Let savings in period 1…
Q: Suppose the government borrows $20 million more next year than this year. Answer questions d and e…
A: since you have asked multiple questions and according to policy we can solve only 1 question and for…
Q: Savings represents a) only funds supplied by foreigners, because Americans don't save. O b) the…
A: Loanable funds market deals with demand and supply of loanable funds to determine equilibrium…
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Q: is the source of the demand for loanable funds. As the interest rate falls, the quantity of loanable…
A: As depicted in the diagram, demand(dd) & supply(ss) of loanable funds is given. The dd for these…
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Q: re limits on interest rate a good idea?
A: - A limit on interest rate is considered to be a good idea by several economists. The limit is…
Q: Why does the demand curve for loanable funds slope downward from left to right? Oa) Interest rates…
A: The demand curve for loanable funds shows the relationship between the amount of the loanable funds…
Q: The interest rate commonly used by banks to borrow from each other outside the US, which is also…
A: When talking about lending and borrowing activities, banks can exchange money among themselves to…
Q: Explain the difference between real and nominal interest rates. Can interest rates ever be negative?…
A: *Answer:
Q: What are the factors that shift the output demand curve? (Select all that apply.) A. Real interest…
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Q: When the interest rate falls, how does the opportunity cost of holding money and the quantity of…
A: Interest rates are defined as the form of reward given to the investors for investing their money…
Q: The table below is broken down by Month, Real Interest Rate (%), Loanable of $), Exogenous Change,…
A: The classical theory of interest rate would depend on the loanable funds theory of interest rate.…
Q: INTEREST RATE IPercent) Supply Demand 100200 Ob 9 S00 GTY OFLOANAHLEFUNDS IBIIions of idollars) is…
A: The interest rate is determined in the market for loanable fund through the intersection of demand…
Q: d) Suppose that the nominal rate of interest increases to 1.4 per cent in (b) on account of the…
A: Interest rate: It refers to the rate at which money from the banks and from the other people will be…
Q: Suppose that there is an increase in Consumption, holding both G and Y* equal. If this is the case,…
A: In an economy, national savings includes private savings and public savings. Private savings is the…
Q: When the interest rate falls, how does the opportunity cost of holding money and the quantity of…
A: Answer- Need to find- When the interest rate falls, other things remaining the same, the opportunity…
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- The table below shows the amount of savings and borrowing in a market for loans to purchase homes, measured in millions of dollars, at various interest rates. InterestRate QuantitySupplied QuantityDemanded5% 98 2216% 129 1917% 160 1608% 178 1429% 196 12410% 214 106 What is the equilibrium interest rate and quantity of loaned funds? r = % Q = Suppose there is a decrease in demand of money, what will happen to interest rates and quantity? Increase in Interest Rates, Increase in Quantity?Increase in Interest Rates, Decrease in Quantity?Decrease in Interest Rates, Increase in Quantity?Decrease in Interest Rates, Decrease in Quantity?Go to this website (http://www.measuringworth.com/ppowerus/) for the Purchasing Power Calculator at measuringWorth.com. How much money would it take today to purchase what one dollar would have bought in the year of your birth?An increase in the real interest O A. increases savings for borrowers, and decreases the savings of lenders. O B. decreases savings for borrowers, but has an uncertain effect on the savings of lenders. O C. increases savings for borrower, but has an uncertain effect on the savings of lenders. O D. has an uncertain effect on the savings of both borrowers and lenders. O E. reduces savings for both borrowers and lenders.
- Suppose the government runs fewer budget deficit and there is a decrease in the average household income. Then, O The new EQ quantity of loanable funds would be indeterminate, , but the new EQ interest rate would increase. O The new EQ quantity of loanable funds would decrease, but the new EQ interest rate would be indeterminate. O The new EQ quantity of loanable funds would be indeterminate, , but the new EQ interest rate would decrease. The new EQ quantity of loanable funds would be indeterminate, but the new EQ interest rate would increase. The new EQ quantity of loanable funds would increase, but the new EQ interest rate would be indeterminate.The prime interest rate is the rate that banks charge their best customers. Based on the nominal interest rates and inflation rates in Table 19.10, in which of the years would it have been best to be a lender? Based on the nominal interest rates and inflation rates in Table 19.10, in which of the years given would it have been best to be a borrower?Interest 6% lonable fund is 4trillion. Suppose there was a change in the tax laws to encourage savers to save more and as a result, assume the equilibrium interest rate falls by 2 % point. By how much the equilibrium loanable funds saved and invested would rise or fall?
- 4. Eleanor makes year-end deposits of 500,000 the first year, 550,000 the second year, 605,000 thethird year, and so on increasing the next year’s deposit by 10% of the deposit in the preceding yearuntil the end of the 10th year. Ronald makes equal year-end deposits of 720,00,000 each year for 10years. A.) Is the gradient of Eleanor’s payments increasing or decreasing?B.) If interest on both funds is 12% compounded annually, who will be able to save more atthe end of 10 years.How should an increase in inflation affect the interest rate on an adjustable-rate mortgage?Imagine that a local water company issued 10,000 ten-year bond at an interest rate of 6. You are thinking about buying this bond one year before the end of the ten years, but interest rates are now 9. Given the change in interest rates, would you expect to pay more or less than 10,000 for the bond? Calculate what you would actually be willing to pay for this bond.
- what is the 4 factor that affects the level of interest rate? and how does each one work?If you receive 500 in simple interest on a loan that you made for 10,000 for five years, what was the interest rate you charged?Lenders of funds in financial market gets opportunity to invest in O a. Banks of the government O b. Productive assets without owning them O c. Goods of a business O d. Provision of utilities for the public
