ECO 101 Chapter 29 Quiz Help
Bonds represent:
Corporate debt
What effect will an investment tax credit have on interest rates and the quantity of savings?
both interest rates and the quantity of savings will increase
if the interest rate increases then
both the quantity saved and the quantity supplied of loanable funds will increase
what would represent loaning money to a firm
buying a bond
crowding out occurs because the government increases the demand for loanable funds, drives up interest rates, and causes: *savings to rise *consumption and investment to fall *savings to fall *consumption and investment to rise
consumption and investment to fall
Stock shares represent:
corporate ownership
When business firms become more pessimistic about the state of the economy, the interest rate --- and the quantity of borrowing and lending ---
decreases; decreases
at lower interest rates, the cost of investing --- and the quantity of funds demanded for investment ---
decreases; increases
A corporation is planning to finance the construction of new offices, but has limited funds. The corporation is likely to:
demand loanable funds by selling bonds
at which stage in life does someone generally dissave the most
during retirement
the loanable funds market is the market where
equilibrium interest rates are determined by the actions of borrowers and lenders
what institution channels loanable funds from savers to borrowers?
financial intermediaries
All else equal, time preference is the desire to
have goods and services sooner rather than later
people will usually save more if the interest rate is
higher
savings is
income that is not spent on consumption goods
savings is:
income that is not spent on consumption goods
An increase in life expectancy should cause saving in the US to:
increase
the buyer of a bond is a:
lender
Trading in the market for loanable funds determines the equilibrium: *amount of borrowing *level of savings *interest rate *level of savings, amount of borrowing, and interest rate
level of savings, amount of borrowing, and interest rate
financial intermediaries:
reduce the costs of moving savings from savers to borrowers and investors
What is income that is not spent on consumption goods? *investments *savings *profits *asset retention
savings
firms primarily raise money by using which two methods
selling stocks and issuing corporate bonds
The supply of savings function shows the relationship between saving and: *consumption *the interest rate *income *age
the interest rate
investment is:
the purchase of new capital goods
an increase in the supply of savings will cause the interest rate
to decrease
Banks act as profit-seeking institutions, taking the supply of loanable funds from households and distributing them to borrowers. (T/F)
true
would an increase in government borrowing most likey cause an increase in the demand for loanable funds?
yes