The Table Shows the Demand for Loanable Funds Schedule and Essay

682 Words Apr 18th, 2011 3 Pages
The table shows the demand for loanable funds schedule and the private supply of loanable funds schedule when the government’s budget
7:6 ***********

A rise in the real interest rate:
Creates a movement up along the demand for loanable funds curve.

The greater a household’s wealth the less is its saving.

If households believe they will experience higher income in the near future, there is a
Rightward shift of the supply of loanable funds curve

If the world real interest rate falls, then a country that is a net foreign lender,
Decrease the amount of its lending.

If national saving equals $100,000, net taxes equal 100,000 and government expenditure equals 25,000, what is private saving?

An increase in the government
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The quanitity of loanable funds demanded increases by 1 trillion at each real interest rate and the quantity of loanable funds supplied increases by 2 trillion at each real interest rate. If the government wants investment to be 9 trillion, it must
Increase; 1

Loanable funds flow among countries because savers are searching for the highest (risk-adjusted) real interest rate and borrowers are searching for the lowest (risk-adjusted) real interest rate.

If the economy’s capital increases over time
Depreciation exceeds gross investment

which of the following is true as the real interest rate increases, people increase the quanitity they save. the supply of loanable funds curve is downward sloping. as disposable income increases, the supply of loanable funds curve becomes steeper.
I only

The Ricardo-Barro effect holds that
B) government budget deficits have no effect on the real interest rate.

All of the following are sources of loanable funds except
Business investment

Investment if financed by which of the following? I. Government spending II. Household saving III. Borrowing from the rest of the world

I, II, and III

Shows the market for loanable funds in Northland. The government budget is blanaced. If the government moves from a balanced to a surplus of 20 billion, the new equibrillium has a real interest rate of ____ and quantity of loanable funds traded equal to
5.5,

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