The demand curve for loanable funds is downward sloping because
A. people save more at higher interest rates.
B. more investments are profitable at low interest rates than at high interest rates.
C. future income is more valuable now at higher interest rates than at low interest rates.
D. Usury laws increase the quantity of funds demanded at low interest rates but do not affect the quantity of funds demanded at high interest rates.
Answer: B
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If the transactions approach to measuring money is used, then the money supply consists of
A) currency only. B) transaction deposits only. C) currency and transaction deposits only. D) currency, checkable and debitable deposits, and traveler's checks.
Assume the government decides to reduce spending in order to reduce the budget deficit, which it financed by borrowing in the real credit market. Where and how should you begin your analysis when analyzing the chain reaction of economic interactions?
a. Start the analysis in the real goods market with aggregate demand shifting to the left. b. Start the analysis in the real goods market with aggregate demand shifting to the right. c. Start the analysis in the real goods market with aggregate supply shifting to the left. d. Start the analysis in the real goods market with aggregate supply shifting to the right. e. Start the analysis in the real credit market with demand for real credit shifting to the left.
Which of the following describes the monopoly market structure?
A. few firms operating as price takers B. single firm operating as a price taker C. single firm that is a price maker D. many firms that are price makers
If a positive permanent supply shock were to occur, the resulting equilibrium would be a:
A. higher level of output at lower prices. B. lower level of output and prices. C. higher level of output and prices. D. lower level of output at higher prices.