Suppose 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 O c. An increase in business confidence Od. 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 Ob. The primary bond market Oc. The Treasury bond market Od. The T-bond market

Suppose that the demand for laonable funds for car in the Milwaukee area is $11million per month at an interest rate of 10 percent per year, $12million at an interest rate of 9 percent per year, $13million at an interest rate of 8 percent per year and so on. a. If the supply of loanable funds is fixed at $17million, what will be the equilibrium interest rate? b. If the government imposes a usury law and says that car loans cannot exceed 3 percent per year, how big will the monthly shortage (or excess demand) for car loans be?  c. How big will the monthly shortage for car loans be if the usury limit is raised to 7 percent per year?

4.5

If the interest rates increase this will _____ the quantity of loanable funds demanded, and if the interest rates decrease this will______it. Select one: a. increase; reduce b. increase; increase c. reduce; increase Od. reduce; reduce