Question 1

Effective usury laws cause:

Accepted Answer

A)  a surplus in the market for loanable funds. 
B)  the quantity of loanable funds demanded to be brought into balance with the quantity supplied. 
C)  the quantity of loanable funds demanded to exceed the quantity supplied. 
D)  the quantity of loanable funds supplied to exceed the quantity demanded. 
A)  a surplus in the market for loanable funds. 
B)  the quantity of loanable funds demanded to be brought into balance with the quantity supplied. 
C)  the quantity of loanable funds demanded to exceed the quantity supplied. 
D)  the quantity of loanable funds supplied to exceed the quantity demanded.

Question 2

Different rents on land reflect differences in the marginal revenue product of land.

Accepted Answer

A) True 
 B)False

Question 3

(Last Word)Suppose you borrow $500 for a year and the lender discounts $75 of interest at the time the loan is made (giving the borrower only $425).The interest rate on this loan is about:

Accepted Answer

A)  12.5 percent. 
B)  14.5 percent. 
C)  17.6 percent. 
D)  10 percent. 
A)  12.5 percent. 
B)  14.5 percent. 
C)  17.6 percent. 
D)  10 percent.

Question 4

Which of the following is not a source of loanable funds?

Accepted Answer

A)  The saving of households. 
B)  Business saving. 
C)  Commercial bank lending. 
D)  Government budget deficits. 
A)  The saving of households. 
B)  Business saving. 
C)  Commercial bank lending. 
D)  Government budget deficits.

Question 5

Henry George's single-tax movement was based on the argument that:

Accepted Answer

A)  the tax structure should consist solely of a highly progressive tax on nonwage incomes. 
B)  interest is unearned income and should be taxed away by government. 
C)  in less developed countries the supply of and demand for land will be such that land will be a free good and therefore capable of bearing sizable taxes. 
D)  a high tax on land rent is justified because land rent performs no incentive function. 
A)  the tax structure should consist solely of a highly progressive tax on nonwage incomes. 
B)  interest is unearned income and should be taxed away by government. 
C)  in less developed countries the supply of and demand for land will be such that land will be a free good and therefore capable of bearing sizable taxes. 
D)  a high tax on land rent is justified because land rent performs no incentive function.

Question 6

The equilibrium interest rate:

Accepted Answer

A)  affects both the size of total output and its composition. 
B)  falls when the demand for loanable funds increases. 
C)  determines the composition of R&D spending but not its total amount. 
D)  increases when the expected rate of return on R&D spending falls. 
A)  affects both the size of total output and its composition. 
B)  falls when the demand for loanable funds increases. 
C)  determines the composition of R&D spending but not its total amount. 
D)  increases when the expected rate of return on R&D spending falls.

Question 7

In making an investment decision,a business firm is most interested in the:

Accepted Answer

A)  nominal interest rate. 
B)  real interest rate. 
C)  nominal interest rate minus the real interest rate. 
D)  the future supply of loanable funds. 
A)  nominal interest rate. 
B)  real interest rate. 
C)  nominal interest rate minus the real interest rate. 
D)  the future supply of loanable funds.

Question 8

Other things equal,the shorter the loan period and the larger the loan size,the higher is the interest rate charged by the lender.

Accepted Answer

A) True 
 B)False

Question 9

Pure or economic profit is:

Accepted Answer

A)  the amount by which accounting profits exceed normal profits. 
B)  determined by subtracting explicit costs from total revenue. 
C)  the return required to retain entrepreneurial talent in some particular line of production. 
D)  the return to any resource the supply of which is perfectly inelastic. 
A)  the amount by which accounting profits exceed normal profits. 
B)  determined by subtracting explicit costs from total revenue. 
C)  the return required to retain entrepreneurial talent in some particular line of production. 
D)  the return to any resource the supply of which is perfectly inelastic.

Question 10

The "future value" of a sum of money refers to:

Accepted Answer

A)  the estimated value of that money invested in a stock portfolio at some future date. 
B)  the purchasing power of a given amount of money adjusted for price changes. 
C)  today's value of a sum of money to be received in the future. 
D)  the amount to which some current sum of money will grow over time. 
A)  the estimated value of that money invested in a stock portfolio at some future date. 
B)  the purchasing power of a given amount of money adjusted for price changes. 
C)  today's value of a sum of money to be received in the future. 
D)  the amount to which some current sum of money will grow over time.

Question 11

(Last Word)Suppose you borrow $500 and agree to pay this $500 plus $75 of interest at the end of a year.The interest rate is:

Accepted Answer

A)  10 percent. 
B)  15 percent. 
C)  12.5 percent. 
D)  7.5 percent. 
A)  10 percent. 
B)  15 percent. 
C)  12.5 percent. 
D)  7.5 percent.

Question 12

On January 1,2010,Alex deposited $5,000 into a savings account that pays interest of 5 percent,compounded annually.If he makes no further deposits or withdrawals,how much will Alex have in his account on December 31,2012 (3 years later)?

Accepted Answer

A)  $5,750. 
B)  $5,788. 
C)  $5,813. 
D)  $5,825. 
A)  $5,750. 
B)  $5,788. 
C)  $5,813. 
D)  $5,825.

Question 13

Usury laws:

Accepted Answer

A)  allocate funds from low-productivity to high-productivity investments. 
B)  establish a legal ceiling on interest rates. 
C)  make more funds available to low-income borrowers. 
D)  create a surplus of loanable funds. 
A)  allocate funds from low-productivity to high-productivity investments. 
B)  establish a legal ceiling on interest rates. 
C)  make more funds available to low-income borrowers. 
D)  create a surplus of loanable funds.

Effective usury laws cause:

Different rents on land reflect differences in the marginal revenue product of land.

(Last Word)Suppose you borrow $500 for a year and the lender discounts $75 of interest at the time the loan is made (giving the borrower only $425).The interest rate on this loan is about:

Which of the following is not a source of loanable funds?

Henry George's single-tax movement was based on the argument that:

The equilibrium interest rate:

In making an investment decision,a business firm is most interested in the:

Other things equal,the shorter the loan period and the larger the loan size,the higher is the interest rate charged by the lender.

Pure or economic profit is:

The "future value" of a sum of money refers to:

(Last Word)Suppose you borrow $500 and agree to pay this $500 plus $75 of interest at the end of a year.The interest rate is:

On January 1,2010,Alex deposited $5,000 into a savings account that pays interest of 5 percent,compounded annually.If he makes no further deposits or withdrawals,how much will Alex have in his account on December 31,2012 (3 years later)?

Usury laws:

Limits, Alternatives, and Choices

The Market System and the Circular Flow

Demand, Supply, and Market Equilibrium

Market Failures: Public Goods and Externalities

Governments Role and Government Failure

Elasticity

Utility Maximization

Behavioral Economics

Businesses and the Cost of Production

Pure Competition in the Short Run

Pure Competition in the Long Run

Pure Monopoly

Monopolistic Competition and Oligopoly

Technology RD and Efficiency

The Demand for Resources

Wage Determination

Natural Resource and Energy Economics

Public Finance: Expenditures and Taxes

Antitrust Policy and Regulation

Agriculture: Economics and Policy

Filters

Exam 17: Rent Interest and Profit

Effective usury laws cause:

Different rents on land reflect differences in the marginal revenue product of land.

(Last Word)Suppose you borrow $500 for a year and the lender discounts $75 of interest at the time the loan is made (giving the borrower only $425).The interest rate on this loan is about:

Which of the following is not a source of loanable funds?

Henry George's single-tax movement was based on the argument that:

The equilibrium interest rate:

In making an investment decision,a business firm is most interested in the:

Other things equal,the shorter the loan period and the larger the loan size,the higher is the interest rate charged by the lender.

Pure or economic profit is:

The "future value" of a sum of money refers to:

(Last Word)Suppose you borrow $500 and agree to pay this $500 plus $75 of interest at the end of a year.The interest rate is:

On January 1,2010,Alex deposited $5,000 into a savings account that pays interest of 5 percent,compounded annually.If he makes no further deposits or withdrawals,how much will Alex have in his account on December 31,2012 (3 years later)?

Usury laws:

Limits, Alternatives, and Choices

The Market System and the Circular Flow

Demand, Supply, and Market Equilibrium

Market Failures: Public Goods and Externalities

Governments Role and Government Failure

Elasticity

Utility Maximization

Behavioral Economics

Businesses and the Cost of Production

Pure Competition in the Short Run

Pure Competition in the Long Run

Pure Monopoly

Monopolistic Competition and Oligopoly

Technology RD and Efficiency

The Demand for Resources

Wage Determination

Natural Resource and Energy Economics

Public Finance: Expenditures and Taxes

Antitrust Policy and Regulation

Agriculture: Economics and Policy

Filters