Exam 13: Saving Investment and the Financial System: The Market for Loanable Funds

If the government reduces transfer payments,what happens to the budget deficit? What curve does this change in the market for loanable funds,which direction does it shift,and what happens to the equilibrium interest rate?

Stock in Frozen Dreams,an ice cream manufacturer,has a price to earnings ratio of 24.Is this comparatively high or low? What are two explanations for the size of this company's price to earnings ratio?

Suppose the government were to replace the income tax with a consumption tax so that interest on savings was not taxed.The result would be that the interest rate

When tax code changes increase saving incentives, the interest rate will _____ and investment will _____.

In the market for loanable funds,the interaction of the demand for,and supply of,loanable funds determines the equilibrium level of

The source of the supply of loanable funds is

Which of the following are effects of an increased budget deficit?

If there is a shortage of loanable funds,then

In a closed economy, Y - C - G equals _____. The variable Y is _____, C is _____, and G is _____.

Suppose a country has only a sales tax.Now suppose it replaces the sales tax with an income tax that includes a tax on interest income.This would make equilibrium

At some point during the financial crisis of 2008-2009,people with uninsured deposits at financial institutions withdrew money from their accounts at those institutions.This phenomenon characterized which element of the financial crisis?

The nominal interest rate is the

If the government institutes policies that diminish incentives to save,then in the loanable funds market

Figure 26-3.The figure shows two demand-for-loanable-funds curves and two supply-of-loanable-funds curves. -Refer to Figure 26-3.Which of the following movements shows the effects of the government going from a budget surplus to a budget deficit?

As real interest rates fall,firms desire to

Suppose the government changed the tax laws,with the result that people were encouraged to consume more and save less.Using the loanable funds model,a consequence would be

Which of the following would not be a result of replacing the income tax with a consumption tax so that interest income was no longer taxed?

Late in the 2000-2009 decade,real estate prices in the U.S.fell by a greater percentage than they had fallen since the

If Canada goes from a large budget deficit to a small budget deficit,it will

Figure 26-2.The figure depicts a supply-of-loanable-funds curve and two demand-for-loanable-funds curves. r Q -Refer to Figure 26-2.Which of the following events would shift the demand curve from D1 to D2?