Exam 23: Finance, Saving, and Investment

A very small country is a net foreign borrower.Its supply of loanable funds increases but it still remains a net foreign borrower.As a result,the equilibrium quantity of loanable funds used in the country ________ and the country's foreign borrowing ________.

If households' disposable income decreases,then

A government budget deficit ________ the demand for loanable funds,________ the real interest rate,and ________ investment.

A rise in the real interest rate

A country's imports are $490 billion and its exports are $529 billion.Choose the correct statement. I.The country is a net foreign borrower. II.The Ricardo-Barro effect holds in this country. III.This country does not have an equilibrium in its loanable funds market.

A small country is a net foreign borrower.Its real interest rate without foreign borrowing is ________ the world real interest rate.

Capital is

An increase in ________ will shift the supply of loanable funds curve ________.

A fall in the real interest rate

Refer to the figure below to answer the following question. Figure 23.2.1 -Refer to Figure 23.2.1.In Figure 23.2.1,the economy is at point A on the initial demand for loanable funds curve DLF?.What happens if the real interest rate rises?

As the ________ interest rate rises ________.

If the government begins to run a larger budget deficit,the demand for loanable funds ________ and the real interest rate ________.

When the inflation rate is zero,the ________.

In the market for loanable funds,if the interest rate is above the equilibrium level

The Ricardo-Barro effect of a government budget deficit is

Refer to the figure below to answer the following questions. Figure 23.2.4 -Refer to Figure 23.2.4.In Figure 23.2.4,the economy is at point A on the supply of loanable funds curve SLF?.What happens if disposable income decreases?

Refer to the figure below to answer the following questions. Figure 23.2.3 -In Figure 23.2.3,if the real interest rate is constant at 6 percent and expected profit falls,the quantity of loanable funds demanded will be

At the beginning of the year,your wealth is $10,000.During the year,you have an income of $90,000 and you spend $80,000 on consumption goods and services.You pay no taxes.Your wealth at the end of the year is

At the beginning of the year,your wealth is $10,000.During the year,you have an income of $80,000 and you spend $90,000 on consumption goods and services.You pay no taxes.Your wealth at the end of the year is

Refer to the figure below to answer the following questions. Figure 23.2.5 -Refer to Figure 23.2.5.In Figure 23.2.5,the initial supply of loanable funds curve is SLF? and the initial demand for loanable funds curve is DLF?.An increase in the expected profit