econ 7.3
How do firms make investment decisions? Firms make investment decisions by _______.
comparing the expected profit with the real interest rate and making the investment if the project has a positive net present value
The loanable funds market is ______.
the aggregate of all the individual financial markets
The demand for loanable funds is determined by ______. The demand for loanable funds changes when ______ changes.
the real interest rate and expected profit; expected profit
The demand for loanable funds increases and the supply of loanable funds increases. As a result, the equilibrium real interest rate ______ and the equilibrium quantity of loanable funds ______. he demand for loanable funds increases and the supply of loanable funds decreases. As a result, the equilibrium real interest rate ______ and the equilibrium quantity of loanable funds ______.
rises, falls, or remains the same; increases rises; increases, decreases, or remains the same