Question on macroeconomics

Assignment Help Macroeconomics
Reference no: EM13571

Question 1

Draw a correctly labeled loanable funds graph that shows what happens to real interest rates for each of the subsequent situations:

a. The government begins providing health care subsidies for all Americans.

b. Private investors become less optimistic about the economy.

c. All overseas conflicts are ended and American troops return home.

Question 2

Which of the following is true when the government is deficit spending?

I. The government becomes a borrower in the loanable funds market.

II. Real interest rates rise.

III. Private investment spending is crowded out.

IV. The total amount of borrowing is decreased.

I and II only.

I and III only.

I, II and III only.

I, III and IV only.

I, II, III and IV.

Question 3

An increase in savings by Americans

a. would most likely increase the supply of loanable funds.
b. would most likely increase the interest rate.
c. would most likely decrease the demand for loanable funds.
d. would most likely decrease the supply of loanable funds.
e. would most likely decrease the quantity demanded of loanable funds.

Question 4

One of the reasons the demand curve for the loanable funds graph is down-sloping is that more investors are willing to supply funds

a. when interest rates are high.
b. when the interest rate is low, the quantity demanded of loanable funds will be less.
c. when the interest rate is low, the quantity demanded of loanable funds will be greater.
d. when the interest rate is high, the quantity supplied of loanable funds will be less.
e. when the interest rate is high, the quantity demanded of loanable funds will be greater.

Question 5

If investors sell their stocks and increase their money holdings due to a bad economy then demand for loanable funds will increase.

a. demand for loanable funds will decrease.
b. supply of loanable funds will increase.
c. supply of loanable funds will decrease.
d. quantity demanded of loanable funds will decrease.

Question 6

Given the loanable funds market illustrated above, which of the following is most likely to be true of quantity demanded and quantity supplied of loanable funds, if the government imposes an effective interest floor of 12%?

a. Quantity Demanded / Quantity Supplied
b. Decrease / Decrease
c. Decrease / Increase
d. Increase / No change
e. Increase / Decrease
f. Increase / Increase

Question 7

If interest rates are high, business investment spending decreases.

true

false

Question 8

If the supply of loanable funds increases, what will happen to real interest rates and the international value of the U.S. dollar (USD)?

a. Real Interest Rates / International Value of USD
b. Increase / Increase
c. Increase / Decrease
d. Decrease / No Change
e. Decrease / Decrease
f. Decrease / Increase

Question 9

If the demand for loanable funds increases, what will happen to real interest rates and the international value of the U.S. dollar (USD)?

a.Real Interest Rates / International Value of USD
b. Increase / Increase
c. Increase / Decrease
d. Decrease / No Change
e. Decrease / Decrease
f. Decrease / Increase

Question 10

Given the loanable funds market illustrated above, which of the following is most likely to be true of quantity demanded and quantity supplied of loanable funds if the government imposes an effective interest ceiling of 6%?

a. Quantity Demanded / Quantity Supplied
b. Decrease / Decrease
c. Decrease / Increase
d. Increase / No change
e. Increase / Decrease
f. Increase / Increase

Question 11

A business will borrow money to complete a project when

a.the interest rate is greater than the rate of return on the project.
b.the interest rate is less than the rate of return on the project.
c. the interest paid is more than the cost of the project.
d. the interest rate is less than the cost of the project.
e. the interest rate is variable over the course of the project.

Reference no: EM13571

Questions Cloud

Current economic theory : Current economic theory and their application or lack of application to contemporary economic problems
Leveraging the power of differences: workforce diversity : Leveraging the Power of Differences: Workforce Diversity and the Impact of Information Systems.
Prepare a cash budget statement : Calculate the expected value of the apartment in 20 years' time. What is the mortgage loan repayment at the beginning of each month
Question on macroeconomics : Draw a correctly labeled loanable funds graph that shows what happens to real interest rates.
Question on macroeconomics : Draw a correctly labeled loanable funds graph that shows what happens to real interest rates.
Differences between sole proprietorship and corporation : Briefly describe the major differences between a sole proprietorship and a corporation
Groups and teams : Your experience with groups and teams in your organisation.
Prepare a work plan and project schedule - gantt chart : Design an online system for the human resources department to manage available job positions.
Write a report on distribution system design : Write a report on Distribution System Design.  Managerial report could have the subsequent structure: 1) Executive summary; 2) Detailed report. Report inhibits:Executive Summary

Reviews

Write a Review

 

Macroeconomics Questions & Answers

  Problem - income elasticity of demand

Problem - Income Elasticity of Demand,  Interpret the following Income Elasticities of Demand (YED) values for the following and state if the good is normal or inferior; YED= +0.5 and YED= -2.5

  Production and cost estimation

Do the estimated coefficients have the required signs to yield a-shaped AVC curve? Discuss the significance using the p-values.

  Application of nash equilibrium and game theory

Application of Nash Equilibrium and Game Theory with examples

  Crises in the banking sector and bank run

Banking crises crisis decreases depositors' confidence in the banking system. What would be the effect of a rumor about a banking crisis on checkable deposits in such a country?

  Describe the present economic crisis situation in europe

Describe the present economic crisis situation in Europe.  Why has it been so difficult for the Europeans to find a solution to this problem?   Comment on what implications the crisis may have for the rest of the world if Europeans are not able to ag..

  Market imperfection associated with negative externalities

An essay on Market imperfection associated with negative externalities.

  Capital structure decisions in perfect capital markets

In a perfect capital market, advices for  a corporate financial manager on making capital structure decisions.

  Derive and compare demand curve

Question based on Derive and compare demand curve,  Derive Ambrose's demand function for peanuts. How does it compare with Johnny's demand curve for peanuts?

  Calculate steady state capital

Changes in government spending and interest rates

  In using the taylor rule

In using the Taylor Rule as a guideline for monetary policy, what are the pros and cons of using forecasted values of inflation and output rather than observed values of these variables?

  Market imperfection associated with negative externalities

Essay on Market imperfection associated with negative externalities

  Positive balance of payment

Question Positive Balance of Payment: "Things will look good for the US if we could just get to where we are consistently running a positive Balance of Payments."

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd