Homework Answers
Answer
Option 4
Net capital outflow increases, and the real exchange rate
decreases
The increase in the supply of loanable funds decreases interest
rates and that increases the net capital outflow which decreases
the real interest rate as the supply of the currency
increases.
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What are the effects of an increase in the supply of loanable funds? Select one: Net...
Suppose the U.S. supply of loanable funds shifts left. This will a. increase U.S. net capital...
Suppose the U.S. supply of loanable funds shifts left. This will a. increase U.S. net capital outflow and increase the quantity of loanable funds demanded. b. decrease U.S. net capital outflow and increase the quantity of loanable funds demanded. c. decrease U.S. net capital outflow and decrease the quantity of loanable funds demanded. d. increase U.S. net capital outflow and decrease the quantity of loanable funds demanded.
The government in an open economy increases spending. As a result, the supply of loanable funds...
The government in an open economy increases spending. As a result, the supply of loanable funds from national saving —, leading to a(n) — net capital outflow __ and a real exchange rate ___, a. falls, reduced, appreciation b. falls, increased, depreciation C increases, increased, appreciation d. increases, decreases, depreciation
Show how a decrease in the supply of loanable funds and an increase in the demand...
Show how a decrease in the supply of loanable funds and an increase in the demand for loanable funds can raise the real interest rate and leave the equilibrium quantity of loanable funds unchanged. Draw a demand for loanable funds curve. Label it DLF0. Draw a supply of loanable funds curve. Label it SLF0. Draw a point at the equilibrium real interest rate and quantity of loanable funds. Label it 1. Now draw a curve that shows an increase in...
which of the following statements about the loanable funds market is (are) correct? (x) When the...
which of the following statements about the loanable funds market is (are) correct? (x) When the supply of loanable funds shifts to the right then the equilibrium real interest rate decreases and the equilibrium quantity of loanable funds decreases. (y) When the demand for loanable funds shifts to the right then the equilibrium real interest rate increases and the equilibrium quantity of loanable funds increases. (z) If the demand for loanable funds shifts to the right and the supply of...
What influences the supply of loanable funds? The supply of loanable funds is influenced by O...
What influences the supply of loanable funds? The supply of loanable funds is influenced by O A. the real interest rate, and as the real interest rate rises, the supply of loanable funds increases O B. expected future income, and the higher a household's expected future income, the smaller is its saving today O c. expected profit OD. a household's wealth, and the greater a household's wealth, the greater is its saving
The supply of loanable funds (the source of funds) consists of Question 1 options: a) Total domestic saving a...
The supply of loanable funds (the source of funds) consists of Question 1 options: a) Total domestic saving and net foreign saving. b) Investment and net exports. c) Total domestic saving and investment. d) Only total domestic saving. Question 2 (1 point) Saved Assuming all else held constant, an increase in net exports will lead to Question 2 options: a) an increase in net foreign saving. b) a decrease in the source of funds. c) a decrease in the trade...
The demand for loanable funds decreases while the supply simultaneously increases. This would cause the equilibrium...
The demand for loanable funds decreases while the supply simultaneously increases. This would cause the equilibrium 1)quantity of loanable funds to increase, but the effect on the equilibrium interest rate would be uncertain. 2)interest rate to decrease, but the new equilibrium quantity would be uncertain. 3)quantity of loanable funds to increase and the equilibrium interest rate to decrease. 4)quantity of loanable funds to decrease and the equilibrium interest rate to increase. 5)interest rate to increase, but the new equilibrium quantity...
Suppose that real interest rates increase across Europe. This development will (DECREASE, INCREASE) U.S. net capital...
Suppose that real interest rates increase across Europe. This development will (DECREASE, INCREASE) U.S. net capital outflow at all U.S. real interest rates. This causes the (SUPPLY OF, DEMAND OF) loanable funds to (INCREASE, DECREASE) because net capital outflow is a component of that curve.
If disposable income increases, people will decide to ________ saving, the supply of loanable funds will...
If disposable income increases, people will decide to ________ saving, the supply of loanable funds will ________ and the real interest rate will ________. A. increase; decrease; rise B. decrease; increase; fall C. decrease; decrease; rise D. increase; increase; fall
Suppose the Bank of Canada raises the overnight loans rate. Describe the ripple effects of this...
Suppose the Bank of Canada raises the overnight loans rate. Describe the ripple effects of this monetary policy. Other short-term interest rates and the exchange rate Consumption expenditure, investment, and net exports The quantity of money and supply of loanable funds Aggregate demand Real GDP growth and the inflation rate O A. rise; increase OB. fall; decrease O c. fall; increase OD. rise; decrease O A. decreases; decrease OB. increases; decrease or remain the same O c. decreases; increase or...
The government in an open economy increases spending. As a result, the supply of loanable funds from national saving —, leading to a(n) — net capital outflow __ and a real exchange rate ___, a. falls, reduced, appreciation b. falls, increased, depreciation C increases, increased, appreciation d. increases, decreases, depreciation
What influences the supply of loanable funds? The supply of loanable funds is influenced by O A. the real interest rate, and as the real interest rate rises, the supply of loanable funds increases O B. expected future income, and the higher a household's expected future income, the smaller is its saving today O c. expected profit OD. a household's wealth, and the greater a household's wealth, the greater is its saving
Suppose the Bank of Canada raises the overnight loans rate. Describe the ripple effects of this monetary policy. Other short-term interest rates and the exchange rate Consumption expenditure, investment, and net exports The quantity of money and supply of loanable funds Aggregate demand Real GDP growth and the inflation rate O A. rise; increase OB. fall; decrease O c. fall; increase OD. rise; decrease O A. decreases; decrease OB. increases; decrease or remain the same O c. decreases; increase or...
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