Exam 9: Saving,investment,and the Financial System

If the supply of loanable funds decreases and the demand for loanable funds increases at the same time,interest rates will:

If the interest rate increases,then:

Explain how an increase in government borrowing reduces private consumption spending and investment spending.What is this effect called?

Other things being equal,a person typically has the largest pool of savings:

If the demand for loanable funds increases,ceteris paribus,interest rates will:

An investment tax credit will cause the interest rate to _____ and borrowing to _____.

The issuer of a bond is a lender.

All else being equal,a working-age person who has more patience tends to have:

If someone buys a bond,economists would say that person is saving,not investing.

Time preference is:

People will usually borrow more if the interest rate:

An increase in the supply of saving curve will cause the equilibrium quantity of saving to:

When banks owned or influenced by the government engage in politicized lending:

Which of the following is NOT a characteristic of a Treasury Bill (T-bill)?

The fall in housing prices that began in 2006 caused many people to default on their mortgages.

Briefly describe the market for loanable funds.Be sure to indicate who participates in this market and what outcomes are determined in the market.

What is the most harmful consequence to GDP from interest rate ceilings?

A seasonal worker saves more when her income rises and saves less when her income falls.This behavior is referred to as:

If the interest rate in the market for loanable funds is below the market-clearing rate,then:

A cause of the financial crisis in 2007-2008 was high inflation.