Have an account?
Skip to Content
Build your own quiz
.png)
12 questions
Show Answers
See Preview
- 1. Multiple Choice
In a closed economy, what is the relationship between saving and investment?
Saving is greater than investment.
Investment is greater than saving.
Investment is equal to saving.
Investment may be greater or smaller than saving
- 2. Multiple Choice
If government purchases are $400 million, taxes are $700 million, and transfers are $200 million, which of the following is true?
Public saving is $500 million.
The budget deficit is $100 million.
The budget deficit is $500 million.
Public saving is $100 million.
- 3. Multiple Choice
When the government runs a deficit, which of the following is true?
T > TR - G
G > T + TR
G > TR - T
T < G + TR
- 4. Multiple Choice
Borrowers are ________ of loanable funds, and lenders are ________ of loanable funds.
demanders; suppliers
suppliers; demanders
suppliers; suppliers
demanders; demanders
- 5. Multiple Choice
The demand for loanable funds has a ________ slope because the lower the interest rate, the ________ number of investment projects are profitable, and the ________ the quantity of loanable funds demanded.
negative; greater; greater
negative; greater; lesser
negative; lesser; greater
positive; lesser; lesser
- 6. Multiple Choice
The supply of loanable funds has a ________ slope because the greater the interest rate, the ________ the reward to saving, and the ________ the quantity of loanable funds supplied.
positive; lesser; lesser
positive; greater; lesser
negative; lesser; greater
positive; greater; greater
- 7. Multiple Choice
Because ________ in the government budget deficit increase the real interest rate, budget deficits can ________ firm investment.
A) increases; increase
decreases; increase
decreases; decrease
increases; decrease
- 8. Multiple Choice
Which of the following will increase the real interest rate?
an increase in the supply of loanable funds
an increase in household saving
an increase in the demand for loanable funds
an increase in the budget surplus
- 9. Multiple Choice
If technological change increases the profitability of new investment for firms, then the ________ curve for loanable funds will shift to the ________ and the equilibrium real interest rate will ________.
supply; right; fall
supply; left; rise
demand; right; rise
demand; left; fall
- 10. Multiple Choice
An increase in public saving has what impact on the market for loanable funds?
The supply of loanable funds increases.
The demand for loanable funds increases.
The supply of loanable funds decreases.
The demand for loanable funds decreases.
- 11. Multiple Choice
If consumers decide to be more frugal and save more out of their income, then this will cause
a shift in the supply curve for loanable funds to the right.
a shift in the supply curve for loanable funds to the left.
a movement to the right along the supply curve for loanable funds.
a movement to the left along the supply curve for loanable funds.
- 12. Multiple Choice
Using the market for loanable funds, which of the following has the potential to raise the real interest rate?
an increase in the demand for loanable funds
an increase in the quantity of loanable funds demanded
an increase in the supply of loanable funds
an increase in the quantity of loanable funds supplied
- Answer choicesTagsAnswer choicesTags