Exam 7: Equilibrium in the Flexible-Price M Odel

If the real interest rate ________, foreign saving will _________.

If households increase their baseline consumption, r would equal

People lend money because they

In the flexible-price model, a decrease in government purchases will result in

If the real interest rate ________, government saving will _________.

The supply of private savings in the economy is equal to

The terms (Y*-C-T), (T-G), and NX in the flow of funds equation represent

The ___________ ensures equilibrium in a flexible-price economy.

The equilibrium interest rate will ________ if foreign income and the foreign real interest rate increase.

If there is a change in the foreign interest rate, r would equal

If the real interest rate ________, household saving will _________.

In the flexible-price model, an increase in the tax rate will result in

If there is an excess supply of loanable funds in the financial markets

In the flexible-price model, a decrease in the household or foreign saving will result in

In the model developed in the text, demand for loanable funds is represented by

The equilibrium interest rate will ________ if the real foreign interest rate increases and the propensity to import increases.

The interest rate will ________ if ________ shifts to the _______.

If domestic businesses become more pessimistic about the future,

The price of loanable funds is

If the real interest rate ________, household saving will _________.