As the prevailing interest rate increases, all of the following occur except
A. Quantity demanded of loanable funds decreases.
B. Cost of borrowing rises.
C. Supply curve for loanable funds shifts to the right.
D. Quantity supplied of loanable funds increases.
Answer: C
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Since 1940, the U.S. government has experienced
A) twice as many annual budget surpluses as annual budget deficits. B) only one year with a budget surplus. C) about the same number of years with budget deficits as with budget surpluses. D) many more budget deficits than budget surpluses.
Which of the following is true?
i. A rational choice is made on the margin. ii. Microeconomics is the study of the national economy while macroeconomics is the study of the global economy. iii. Economists try to understand how the economic world works by testing normative statements. A) only ii B) only i C) only iii D) i and ii E) i and iii
According to the Monetarists, average inflation is higher today than it was a hundred years ago because of
a. the lack of fiscal responsibility. b. the increased use of stabilization policy. c. high interest rates, which increase the cost of borrowing. d. unstable investment demand. e. unstable money demand.
An option may add value to a transaction because:
a. interest charges are reduced. b. the price of the good is reduced. c. additional information may become available. d. options provide buyers with monopsony power.