Exploring Economics
8th Edition
ISBN: 9781544336329
Author: Robert L. Sexton
Publisher: SAGE Publications, Inc
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- In the Loanable Funds Market Model, ceteris paribus, it typically follows that when the federal government runs a budget deficit, there will be préssure on interest rates and pressure on private investment. This is referred to as Select one: O a. upward; upward; crowding out Ob. upward; downward; crowding out O c. downward; downward; financial intermediation Od. downward; upward; financial intermediation.arrow_forwardPlease see the images below. I just need to verify that the answers I have are the correct ones.arrow_forwardAnalyze the impacts of the economy entering a time of expansion (i.e. "good times") on the market for loanble funds. (Assume that expectations about the future don't change.) Because of the expansion, equilibrium interest rates will and the equilibrium quantity of loanable funds will O decrease ; rise, fall, or not change (ambiguous effect) O increase ; decrease O increase ; rise, fall, or not change (ambiguous effect) rise, fall, or not change (ambiguous effect) ; increase O rise, fall, or not change (ambiguous effect) ; decreasearrow_forward
- What is meant by "demand deposits"? O a) Bank accounts where you can't withdraw money by writing a check, but can withdraw the money at a bank-or can transfer it easily to a checking account. O b) An institution that operates between a saver with financial assets to invest and an entity who will receive those assets and pay a rate of return. c) Deposits in banks that are available by making a cash withdrawal or writing a check. C PRECEDENS 22 d) A bank's liabilities can be withdrawn in the short term while its assets are repaid in the long term.arrow_forwardThe figure shows two demand-for-loanable-funds curves and two supply-of-loanable-funds curves. B * C D F S₂ D₂ S₁ D₁ Refer to Figure 1. A shift of the supply curve from S 2 to S 1 is called O a. a decrease in the demand for loanable funds. O b. a decrease in the quantity of loanable funds demanded. O c. an increase in the supply for loanable funds. O d. an increase in the quantity of loanable funds supplied.arrow_forwardRefer to the figure below to answer the following questions. Real interest rate (percent per year) 10 DLF 150 300 450 600 750 900 Loanoble funds (billions of 2007 dollars) Figure 7.2.3 In Figure 7.23, when the real interest rate is 6 percent, the quantity of loanable funds demanded is Select one: O A $150 billion. O B. $450 billion. O C $600 billion. O D. $300 billion. O E. any amount less than $450 billion.arrow_forward
- In the Loanable Funds Market Model, ceteris paribus, which of the following events would best explain an increase in interest rates, together with a decrease in investment? Select one: a. The government went from running a budget surplus to running a budget deficit. b. Private investors anticipate a higher return on their private-sector investments in the future. O c. The government reduced the tax rate on savings income. O d. None of the above is correct.arrow_forwardSuppose the market for loanable funds is currently in equilibrium. Which of the following factors will cause an increase in the interest rate? Select one: O a. An increase in the household saving rate O b. An expansionary monetary policy Oc. An increase in business confidence O d. A decrease in government budget deficits Travis buys a 20-year, $10,000 US Treasury bond with a coupon rate of 5%. After three years, he has some unexpected expenses and decides to sell the bond. In which market will Travis sell his bond? Select one: O a. The secondary bond market O b. The primary bond market O c. The Treasury bond market Od. The T-bond marketarrow_forwardK In the figure to the right, the leftward shift from the demand for loanable funds curve DLF, to the demand for loanable funds curve DLF3, could be the result of O A. the economy entering a recession. B. the economy entering an expansion. O C. a decrease in interest rates during an economic recession. O D. a government budget surplus. O E. a increase in interest rates during an economic expansion. Real interest rate (percent per year) 10 8 6 4 2 0 DLF₁ DLF₂ DLF3 1.5 2.0 2.5 3.0 3.5 Loanable funds (trillions of 2005 dollars)arrow_forward
- Give typing answer with explanation and conclusionarrow_forwardQuestion 31 Figure 26-1 The figure depicts a demand-for-loanable-funds curve and two supply-of-loanable-funds curves. S₁ Demand Refer to Figure 26-1. Which of the following events would shift the supply curve from S₁ to S2? O a. In response to tax reform, firms are encouraged to invest more than they previously invested. O b. In response to tax reform, households are encouraged to save more than they previously saved. c. Government goes from running a balanced budget to running a budget deficit. O d. Any of the above events would shift the supply curve from S₁ to S2.arrow_forwardFinancial capital includes A. money, stocks, and bonds, which are capital because they provide businesses with financial resources O B. money, stocks, and bonds, which are not capital because they are not used to produce goods and services O C. banks and credit unions, which are capital because they are used to produce financial services O D. the nation's banking system, which is capital because it is the backbone of the economyarrow_forward
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