Exam 9: Saving,investment,and the Financial System

If an increase in the expected future returns on investment leads to an increase in the current level of investment projects undertaken,the loanable funds market will experience an increase in the _____ loanable funds and _____ in equilibrium interest rates.

Which of the following is NOT a role of commercial banks?

In reference to the consumption-smoothing theory,a person typically saves the most:

The interest rate is determined by the supply and demand of loanable funds.

Use the following to answer questions Figure: Market for Loanable Funds -(Figure: Market for Loanable Funds)Equilibrium in this market for loanable funds occurs when the quantity of loanable funds is:

A decrease in investment demand:

In the lifecycle theory,a worker does most of her borrowing during her early working years.

When the interest rate increases,the:

If the supply of loanable funds increases,ceteris paribus,the quantity of loanable funds exchanged will:

Briefly discuss four factors that can cause financial intermediation to fail.

Which of the following is NOT a reason people borrow?

If the government offers an investment tax credit,other things equal,it is likely that interest rates would rise.

A binding interest rate ceiling creates _____ savings.

A surplus of savings in the loanable funds market will:

The price of savings is:

A ceiling on interest rates results in:

The financial crisis of 2007-2008 was led by a decrease in the leverage ratio for financial intermediaries.

The issuer of a bond is a:

Lehman Brothers was which type of an institution?

Which of the following did NOT contribute to the financial crisis of 2007-2008?