The supply of loanable funds reflects the willingness of
a. businesses to borrow loanable funds for new capital at various interest rates
b. consumers to spend loanable funds for items, such as new cars, at various interest rates
c. savers to provide loanable funds to the loanable funds market at various interest rates
d. firms to provide the funds, which is why production occurs in the first place
e. people to invest in business enterprise, if the price is right (meaning if the interest rate is right)
C
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According to the Aggregate Demand Aggregate Supply diagram, short-term, an anti-inflation policy creates:
A. higher output. B. higher unemployment C. lower inflation. D. higher inflation.
Which of the following statements is true?
A) In a competitive market, the invisible hand encourages the movement of resources from more productive uses to less productive uses. B) In a competitive market, firms in the long run tend to earn positive economic profits. C) Competitive equilibrium provides incentives for entrepreneurs to shift their resources from unprofitable industries to profitable ones. D) At the competitive equilibrium, production occurs at the point of maximum average total cost.
The expansionary monetary and fiscal policies of the 1960s resulted in
A) low inflation rates and low rates of unemployment. B) high inflation rates and high rates of unemployment. C) high inflation rates and low rates of unemployment. D) low inflation rates and high rates of unemployment.
Suppose life becomes more unpredictable and households decide to increase their precautionary savings. In this case, the loanable funds model predicts that
A) interest rate goes down, and quantity of borrowed funds increases. B) interest rate goes down, and quantity of borrowed funds decreases. C) interest rate goes up, and quantity of borrowed funds decreases. D) interest rate goes up, and quantity of borrowed funds increases.