Exam 7: Finance, Saving, and Investment

During the financial crisis in 2007 and 2008, financial institutions believed that default risks were higher. As a result, there was ________ in the supply of loanable funds and a ________ in the real interest rate.

According to the Ricardo-Barro effect, government deficits

-In the above figure, the economy is at point a on the initial supply of loanable funds curve SLF₀. What happens if real wealth decreases?

The nominal interest rate approximately equals which of the following?

National saving equals

The Ricardo-Barro effect asserts that

A decrease in the demand for loanable funds and a leftward shift of the demand for loanable funds curve results from

Due to the recession in 2008, firms decreased their profit expectations. As a result, there was a ________ shift in the ________ loanable funds curve.

Which of the following is NOT a determinant of household saving?

Initially the nominal interest rate is 8 percent and the inflation rate is 5 percent. People know that the inflation rate increases to 10 percent. What is the new nominal interest rate?

"An increase in the real interest rate increases the quantity of investment." Is the previous statement correct or incorrect?

If the government runs a budget deficit, then

Suppose that you took out a $1,000 loan in January and had to pay $75 in annual interest. During the year, inflation was 6 percent. Which of the following statements is CORRECT?

Changes in all of the following shift the supply curve of loanable funds EXCEPT

The term capital, as used in macroeconomics, refers to

The Ricardo-Barro effect of a government budget deficit refers to

The table below shows data for the United States. Between 2013 and 2014, the real interest rate ________ and caused a ________ the demand for loanable funds curve.

If the nominal interest rate is 7 percent and the inflation rate is 1 percent, the real interest rate is approximately

When the inflation rate is negative, the

Technological progress that increases the expected profit shifts the demand for loanable funds curve