A government budget deficit affects the supply of loanable funds, rather than the demand for loanable funds, because
a. in our model of the loanable funds market, we define "loanable funds" as the flow of resources available to fund private investment.
b. in our model of the loanable funds market, we define "loanable funds" as the flow of resources available from private saving.
c. markets for government debt are fundamentally different from markets for private debt.
d. of our assumption that the economy is closed.
a
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The price of a bag of pretzels rises from $2 to $3 and the quantity demanded decreases from 100 to 60. What is the price elasticity of demand?
A) 1.0 B) 1.25 C) 40.0 D) 20.0 E) 0.80
According to an article in the Wall Street Journal, unlike airlines, even elite hotels don't have sophisticated systems that can react quickly to changes in demand. Even if they could, many hoteliers say people don't respond that much to lower rates
"We've tested this, cutting our rates by $50 [per night], and we didn't see an appreciable response in occupancy," says Jim Schultenover, a vice president for Ritz-Carlton. Source: Jesse Drucker, "In Times of Belt-Tightening, We Seek Reasonable Rates," Wall Street Journal, April 6, 2001. Based on the information above, the demand for hotel rooms is A) perfectly elastic. B) inelastic. C) unit elastic. D) elastic.
Refer to the payoff matrix below. Which of the following is true for Happy Campers?
A) The Low strategy dominates the Middle strategy
B) The High strategy dominates the Low strategy.
C) The Low strategy dominates the High strategy.
D) The Middle strategy dominates the Low strategy.
If demand is inelastic and price is raised
A. quantity demanded will fall and total revenue will fall. B. quantity demanded will fall and total revenue will rise. C. quantity demanded will rise and total revenue will rise. D. quantity demanded will rise and total revenue will fall.