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