If the government issues new government bonds to finance a budget deficit, the supply of loanable funds will ________ and the equilibrium amount of investment will ________
A) increase; increase
B) increase; decrease
C) decrease; increase
D) decrease; decrease
D
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The figure above shows the market for bank reserves in Futureland. If the Bank of Futureland undertakes an open market purchase of government securities that changes the quantity of reserves by $25 billion, then the federal funds rate will
A) fall to 4 percent a year. B) remain at 6 percent a year. C) rise to 8 percent a year. D) change, but more information is needed to determine by how much. E) None of the above answers is correct.
A small business owner earns $60,000 in revenue annually. The explicit annual costs equal $40,000. The owner could work for someone else and earn $25,000 annually. The owner's business profit is ________ and the economic profit is ________
A) $20,000, $5,000 B) $20,000, -$5,000 C) $25,000, -$5,000 D) $45,000, -$5,000
An asset is said to be illiquid when:
a. it lacks purchasing power. b. it cannot act as a store of value. c. it is an illegal tender. d. it cannot be readily exchanged for goods. e. it cannot be used to settle debts.
The demand for real estate derives from the need that market participants (e.g., owner occupants, tenants, renters) have for shelter and convenient access to other locations. This competition for physical location and space occurs in the:
A. User Market B. Capital Market C. Government Sector D. Property Market