Exam 7: Finance, Saving, and Investment

-In the above figure, a decrease in the real interest rate will result in a movement from point E to

France's government is running a budget deficit. With no Ricardo-Barro effect, which of the following events will occur? I. The supply curve of loanable funds will shift leftward. II. A higher real interest rate crowds out investment. III. Saving increases.

-In the above figure, if the real interest rate is 8, there is

If the Ricardo-Barro effect is present, a government budget deficit raises the equilibrium real interest rate by ________ and decreases the equilibrium quantity of investment by ________ than if the Ricardo-Barro effect is absent.

The nominal interest rate is approximately equal to the real interest rate minus the inflation rate.

-In the above figure, if the real interest rate is 6 percent, the quantity of loanable funds demanded is

The demand for loanable funds is the relationship between loanable funds and the ________ other things remaining the same.

If a bank's net worth is negative, then the bank definitely is

In November 2008, Grand Canyon Education chose to finance expansion by offering ownership in its firm. These owners of Grand Canyon Education the are entitled to a share of the firm's profits. This financing is an example of

National saving is defined as the amount of

A decrease in the real interest rate leads to a ________ the demand for loanable funds curve, and a decrease in the expected profit leads to a ________ the demand for loanable funds curve.

If households' disposable income decreases, then

People know that the inflation rate will increase from 3 percent to 5 percent. As a result

If the nominal interest rate is 8 percent and the inflation rate is 2 percent, the real interest rate is approximately

All of the following are sources of loanable funds EXCEPT

In January 2017, Tim's Gyms, Inc. owned machines valued at $1 million. During the year, the market value of the equipment fell by 30 percent. During 2017, Tim spent $200,000 on new machines. During 2017, Tim's net investment totaled

Which of the following is TRUE? I. As the real interest rate increases, people increase the quantity they save. II. The supply of loanable funds curve is downward sloping. III. As disposable income increases, the supply of loanable funds curve becomes steeper.

A nation's investment must be financed by

Facebook sold shares of stock for the first time in an IPO on May 18, 2012. The stock originally sold for $38 per share. As of October 19, 2012, a share of Facebook stock was valued at $19 per share. The decrease in the value of a share of Facebook purchased in May and still owned in October is called

As the ________ interest rate increases, the quantity of loanable funds demanded ________.