"When there is a shortage of loanable funds, the real interest rate will increase." Explain whether the previous statement is correct or not
What will be an ideal response?
The statement is correct. The shortage of loanable funds means that there are firms and others attempting to obtain loans who cannot do so. As a result, the real interest rate rises until equilibrium is attained.
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The demand curve is also the
A) total cost curve. B) total benefit curve. C) marginal cost curve. D) marginal benefit curve. E) marginal deadweight cost curve.
Using Figure 4.1, suppose that point B represents the optimal mix of output for a society. If market forces cause society to produce and consume at point C, then
A. The forces of supply and demand will return society to point B. B. There is government failure. C. Points A and D are unattainable with the given resources and technology. D. There is market failure.
Answer the following questions true (T) or false (F)
1. Suppose the extra annual cost to a nation to enact a mandatory seat belt law for motorcycles is $850. Then, the nation should enact this seat belt law if doing so results in an additional benefit of $850 or more each year. 2. The government makes all economic decisions in a mixed economy. 3. When voluntary exchange takes place, both parties gain from the exchange.
A fishery collapse occurs when the:
A. Fishery goes out of business B. Fishery is taken over by a government agency C. Fishery's population is harvested at a higher rate than it reproduces D. Fishery's population reproduces at a higher rate than it's harvested