What would happen in the market for loanable funds if the government were to decrease the tax rate on interest income?
a. the supply of loanable funds would shift right and investment would increase.
b. the supply of loanable funds would shift left and investment would decrease.
c. the demand for loanable funds would shift right and investment would increase.
d. the demand for loanable funds would shift left and investment would decrease.
A
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Due in part to record low interest rates on U.S. Treasury Bonds,
A) investors searching for higher yields bought corporate bonds B) interest rates on corporate bonds rose C) corporations faced higher borrowing costs D) many corporations were at greater risk of defaulting
Risk that is common to all assets of a certain type is referred to as
A) systematic risk. B) unsystematic risk. C) idiosyncratic risk. D) structural risk.
A competitive market maximizes social welfare because in a competitive market,
A) profits are zero. B) price equals marginal cost of the last unit produced. C) price equals average cost of the last unit produced. D) there is free entry and exit.
Which of the following would most likely increase the demand for televisions?
a. a decrease in the price of televisions b. a decline in consumer income c. a decrease in the price of home stereo systems, a substitute for televisions d. a decrease in the price of DVD players, a product that is complementary with televisions