If there is a surplus of loanable funds
a. the quantity of loanable funds demanded is greater than the quantity of loanable funds supplied and the interest rate is above equilibrium.
b. the quantity of loanable funds demanded is greater than the quantity of loanable funds supplied and the interest rate is below equilibrium.
c. the quantity of loanable funds supplied is greater than the quantity of loanable funds demanded and the interest rate is above equilibrium.
d. the quantity of loanable funds supplied is greater than the quantity of loanable funds demanded and the interest rate is below equilibrium.
C
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Suppose that the interest rate is so low that banks currently refuse to make loans. An increase in the supply of high-powered money will
A) have no effect on the money supply if all the new high-powered money ends up as bank reserves. B) have no effect on the money supply if all the new high-powered money ends up as cash in the hands of the nonbank public. C) raise the money supply depending on banks reserve-holding ratio. D) All of the above are correct.
What is/are the central argument(s) against tariffs?
(a) They redistribute income away from consumers who are paying higher prices because of the tariffs. These rents are given to the individual industries that are protected by the tariffs and are operating inefficiently. (b) A laissez-faire economy is the American way. (c) They protect the wealthy. (d) They benefit only fast-growing industries.
Monopolistic competition is characterized by: a. homogeneous products
b. barriers to entry. c. firms earning economic profits in the long run. d. differentiated products.
How do critics of stabilization policy view the “political business cycle”?
A. They suggest shorter election cycles would improve stabilization. B. They believe that politicians cause economic instability, due mainly to the election schedule. C. They believe that the Fed can resist political pressure and stabilize the economy. D. They believe that politicians do not know enough economics in order to stabilize the economy.