negative relation between the real interest rate and investment. ANS: A DIF: 1 REF: 26-3 The increased saving would increase the quantity of loanable funds supplied. invest less, so the supply of loanable funds slopes downward. 62. ANS: D PTS: 1 DIF: 1 REF: 33-3. c. invest more, so the supply of loanable funds slopes upward. b. save less, so the supply of loanable funds slopes downward. a profit maximizing single-price monopolist charges a price equal to. d. more money, so they lend less, and the interest rate rises. TOP: Aggregate demand slope MSC: Definitional. an indexed bond. a. at any interest rate the supply of loanable funds is less; a higher interest rate rises private saving b. Other things the same, a higher interest rate induces people to. D. invest less, so the supply of loanable funds slopes downward. Other things the same, a decrease in the price level induces people to hold Other things the same, the aggregate quantity of goods demanded decreases if. The likely response is A) the corresponding excess supply for bonds will cause the price of bonds to increase, and the interest rate to fall, until the quantity demanded of money equals the quantity supplied of money. A. c. invest more, so the supply of loanable funds slopes upward. See the answer Show transcribed image text Expert Answer 1) Higher interest rates induce people to save more and consume less. 4 min read A woman wearing a mask at an ATM Interest rates have been raised from 0.75% to 1% - their highest level for 13 years. a higher interest rate raises private . Many experts believe that Canada is in the midst of a housing bubble. c. people would want to lend more, making the quantity of loanable funds supplied increase. Tap card to see definition . What is likely to happen to the equilibrium price and output if a perfectly . c. raises the interest rate and reduces investment. d. B. save less, so the supply of loanable funds slopes downward. c. invest more, so the supply of loanable funds slopes upward. Thus people can be induced to save more by offering a high rate of interest. It was a . c. invest more, so the supply of loanable funds slopes upward. d. invest less, so the supply of loanable funds slopes downward. a. real wealth falls. when the real interest rate is 5 percent, the money, or nominal interes … What is likely to happen to the equilibrium price and output if a perfectly competitive firm were to become a monopolist Click card to see definition . But this is more than offset by a strong expansion in domestic investment that is driven by two things: first, as in the previous policy, the higher number of hours worked increases the productivity of capital, which fosters investment; second, the reduction in tax rates itself fosters investment. First, a lower price induces people to substitute more of the good whose price has fallen for other goods, increasing the quantity demanded. other things the same, a higher interest rate induces people to suppose people expect inflation to be 3 percent during the next several years. b. fell. less risk and so pay higher interest. b. people would want to lend less, making the supply of loanable funds decrease. The Bank of England hopes to slow the rate. C.invest more, so the supply of loanable funds slopes upward. b. interest rates rise, so firms decrease investment. d. Other things the same, a higher interest rate induces people to a. save more, so the supply of loanable funds slopes upward. As a result, the current account deteriorates. d. All of the above are correct. supply is upward because people loan money when interest is high. d. invest less, so the supply of loanable funds slopes downward. B.save less, so the supply of loanable funds slopes downward. b. people would want to lend less, making the supply of loanable funds decrease. Other things the same, when the price level rises, a. interest rates rise, so firms increase investment. Other things the same, a higher interest rate induces people to a. save more, so the supply of loanable funds slopes upward. 7 . Other things the same, a higher interest rate induces people to a. save more, so the supply of loanable funds slopes upward. demand is downward because people don't borrow when interest rates are high. b. save less, so the supply of loanable funds slopes downward. Other things the same, people in the United States would want to save more if the real interest rate in the United States a. fell. 11) Which of the following are effects of an increased budget deficit? Neither of these effects is relevant to a change in prices in the aggregate. . b. people would want to lend less, making the supply of loanable funds decrease. ANS: B PTS: 1 DIF: 2 REF: 33-3 8 . Gravity. The increased saving would increase the quantity of loanable funds demanded. a profit maximizing single-price monopolist charges a price equal to Rearranging the previous equation, we obtain: R $ −πUS= Rf−πf, so that the real rate of interest in the US and other countries must be the same, in the long . The Rate of Interest: The rate of interest is the reward for saving. a. The hi … View the full answer invest more, so the supply of loanable funds slopes upward. If the rate of interest rises people may voluntarily curtail their consumption to save more. Question: Other things the same, when the interest rate rises, a. people would want to lend more, making the supply of loanable funds increase. Normally people save more when the rate of interest is high than when it is low. D.invest less, so the supply of loanable funds slopes downward. c. people would want to lend more, making the quantity of loanable funds supplied increase. This paper presents a series of failed attempts to escape this prediction. Other things the same, when the interest rate rises, . Some people have made a lot of money in the stock market by using insider information, but these cases are not contrary to the efficient markets hypothesis even though they are illegal. A bond that never matures is known as a perpetuity. c. rose. save less, so the supply of loanable funds slopes downward. ANS: A DIF: 1 REF: 26-3 Other things the same, when the interest rate rises, a. people would want to lend more, making the supply of loanable funds increase. invest more, so the supply of loanable funds slopes upward. Economics. c. people would want to lend more, making the quantity of loanable funds supplied increase. c. interest rates fall, so firms increase investment. the rights inherent in a managerial position to make decisions, give . Ch 26 hw - ECON131 Other things the same, a higher interest rate induces people to A. save more, so the supply of loanable funds slopes upward. A policy that induces people to save more shifts . This problem has been solved! d. invest less, so the supply of loanable funds slopes downward. In order for people to be happy holding both types of assets, the US interest rate must be higher. b. save less, so the supply of loanable funds slopes downward. Sticky prices, money, backward-looking Phillips curves, alternative equilibrium selection rules, and active Taylor rules do not convincingly overturn the result. when the real interest rate is 5 percent, the money, or nominal interes …. New questions in Business. est rates, the same model model predicts that inflation will smoothly rise, both in the short run and long run. an intermediary bond. Economics questions and answers. c. more money, so they lend more, and the interest rate falls. Question: Other things the same, a higher interest rate induces people to save more, so the supply of loanable funds slopes upward. Other things the same, when the interest rate rises a. people would want to lend more, making the supply of loanable funds increase. c. the dollar appreciates. Other things the same, a higher interest rate induces people to a. save more, so the supply of loanable funds slopes upward. The discount rate is the interest rate charged on loans made by the Federal Reserve to commercial banks and other financial institutions. That is the reason why the supply of the loanable fund slope upward. suppose people expect inflation to be 3 percent during the next several years. b. less money, so they lend more, and the interest rate falls. c. people would want to lend more, making the quantity of loanable funds supplied increase. C. invest more, so the supply of loanable funds slopes upward. a junk bond. b. save less, so the supply of loanable funds slopes downward. Question: Other things the same, when the interest rate rises, a. people would want to lend more, making the supply of loanable funds increase. In February, the average price of a Canadian house hit $816,000 — up 20% compared to the same period a year before. This problem has been solved! Other things the same, a higher interest rate induces people to save more, so the supply of loanable funds slopes upward. Tap again to see term . The lending facility through which these short-term loans . b. the interest rate rises. This normally increases quantity demanded further. Ch 26 hw - ECON131 Other things the same, a higher interest rate induces people to A.save more, so the supply of loanable funds slopes upward. The answer is "A". 9. The slope of the demand for loanable funds curve represents the. Other things the same, when the interest rate rises, the present value of future revenues from investment projects . less risk and so pay lower interest. Consider a money market in which there is an excess supply of money at the prevailing interest rate. Compared to long-term bonds, other things the same, short-term bonds generally have more risk and so pay higher interest. other things the same, a higher interest rate induces people to. d. interest rates fall, so firms decrease investment. It must be higher by exactly the amount of the increased depreciation on the dollar. d. raises the interest rate and investment. d. invest less, so the supply of loanable funds slopes downward. 63. save less, so the supply of loanable funds slopes downward. Second, the lower price creates a higher real income. d. perpetuity. . Other things the same, an increase in the interest rate a. would shift the demand for loanable funds to the right. 97. 24 New questions in Business other things the same, a higher interest rate induces people to: whether the economy is in a recession is illustrated in the ad/as model by how close the _____________________ is to the potential gdp line. b. people would want to lend less, making the supply of loanable funds decrease. Click again to see term . 97. d. upward because an increase in the interest rate induces people to invest more. invest less, so the supply of loanable funds slopes downward. t rate, will be. 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