As the economy enters a strong expansion, then firms' demand for loanable funds
A) increases because the nominal interest rate rises.
B) increases because expected profit increases.
C) decreases because expected profit decreases.
D) decreases because the nominal interest rate falls.
E) increases because the real interest rate rises.
B
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Refer to Figure 12-4. If the market price is $30, should the firm represented in the diagram continue to stay in business?
A) No, it should shut down because it cannot cover its variable cost. B) Yes, because it is making a profit. C) No, it should shut down because it is making a loss. D) Yes, because it is covering part of its fixed cost.
When an economy's actual output is smaller than its potential at some point in time, we say that it is experiencing:
A. a positive output gap. B. a negative output gap. C. inflation. D. deflation.
When there is a sudden decrease in the real interest rate in Canada, the Canadian dollar will depreciate
a. True b. False Indicate whether the statement is true or false
A real quantity is a quantity measured:
A. by the average quantity. B. using real prices. C. in terms of current dollar value. D. in physical terms.