Reference no: EM131391987
1. Economists use _____ as a model to explain how savers and borrowers come together to determine the equilibrium rate of interest.
the financial system
aggregate demand and aggregate supply
the market for loanable funds
the money market
2. The downward slope of the demand for loanable funds shows that:
savers supply more funds when interest rates are higher.
savers supply more funds when interest rates are lower.
more potential investment projects appear profitable when interest rates are higher.
more potential investment projects appear profitable when interest rates are lower.
3. The upward slope of the supply of loanable funds shows that:
savers will supply a greater quantity of funds when interest rates are higher.
savers will supply a greater quantity of funds when interest rates are lower.
more potential investment projects appear profitable when interest rates are higher.
more potential investment projects appear profitable when interest rates are lower.
4. A surplus of loanable funds will result if the:
demand for loanable funds increases.
supply of loanable funds decreases.
nominal interest rate is held above the equilibrium level.
nominal interest rate is held below the equilibrium level.
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