Mods 4.6-4.7: The Money & Loanable Funds Markets

Front

What will happen to the money supply if a Central Bank in a limited reserves economy sells bonds?

Back

money supply will decrease

Front

The real interest rate equals:

Back

the nominal interest rate minus the inflation rate

Front

It is a basic accounting fact that the level of investment in a closed economy must equal the level of:

Back

national savings

Front

Which of the following will increase the demand for loanable funds? a federal government budget surplus, an increase in perceived business opportunities, an increase in the interest rate, positive capital inflows, a decrease in private saving rates

Back

an increase in perceived business opportunities

Front

Which of the following will increase the supply of loanable funds? Options: an increase in government debt, decreased government borrowing, an increase in private saving rates, an increase in the expected inflation rate, a decrease in capital inflows

Back

an increase in private saving rates

Front

The graph of the loanable funds market is different than that of the money market in which of the following ways?
Options:
The demand curve slopes downward.
The demand curve slopes upward.
The supply curve slopes downward.
The supply curve slopes upward.
Price level is on the vertical axis.

Back

The supply curve slopes upward.