ScienceEconomics4th Problem Set
Please enter something

4th Problem Set

Vada Morris avatar Vada Morris
14 October 2022
4.7 (114 reviews)
12 test answers

Unlock all answers in this set

Unlock answers (8)
question
When a country saves a larger portion of its GDP than it did before, all else equal, it will have
answer
more capital and higher productivity.
question
Compared to stocks, bonds offer the holder
answer
lower risk and lower potential return.
question
Which of the following is correct?
answer
The financial system channels funds from savers to borrowers.
question
The source of the supply of loanable funds
answer
is saving and the source of demand for loanable funds is investment.
question
According to the definitions of private and public saving, if Y, C, and G remained the same, an increase in taxes would
answer
lower private saving and raise public saving
question
Which of the following could explain a decrease in the interest rate and the equilibrium quantity of loanable funds?
answer
The demand for loanable funds decreases.
question
People who buy newly issued stock in a corporation such as Crate and Barrel provide
answer
equity finance and so become part owners of Crate and Barrel.
question
If national saving in a closed economy is greater than zero, which of the following must be true? a. Either public saving or private saving must be greater than zero.
answer
Either public saving or private saving must be greater than zero. Investment is positive. Y - C - G > 0 All of the above are correct.
question
The primary economic function of the financial system is to
answer
match one person's saving with another person's investment.
question
What would happen in the market for loanable funds if the government were to run a budget surplus?
answer
Interest rates would fall.
question
If there is a shortage of loanable funds, then
answer
quantity demanded is greater than quantity supplied and the interest rate will rise.
question
Which of the following would necessarily increase the equilibrium interest rate?
answer
The demand for loanable funds shifts right and the supply of loanable funds shifts left.