Multiple Choice Questions:
1. Capital outflows to foreign countries tend to?
a. Make domestic real interest rates higher than they would otherwise have been.
b. Reduce the funds available for domestic capital investment.
c. Cause the saving supply curve to be to the left of the national saving supply curve.
d. Do all of the above.
2. A lower real interest rate will?
a. Increase the loanable funds demand curve.
b. Decrease the loanable funds demand curve.
c. Increase the dollar amount of loanable funds exchanged but not change the loanable funds demand curve.
d. Decrease the dollar amount of loanable funds exchanged but not change the loanable funds demand curve.
3. The discovery of profitable new technological investment opportunities?
a. Would increase the loanable funds demand curve.
b. Would decrease the loanable funds demand curve.
c. Would leave the loanable funds demand curve unchanged.
d. Could either increase or decrease the loanable funds demand curve.
4. A combination of higher business taxes and a reduction in the level of new profitable technological investment opportunities?
a. Would increase the loanable funds demand curve.
b. Would decrease the loanable funds demand curve.
c. Would leave the loanable funds demand curve unchanged.
d. Could either increase or decrease the loanable funds demand curve.
5. A higher real interest rate will?
a. Increase the supply of loanable funds.
b. Decrease the supply of loanable funds.
c. Increase the dollar amount of loanable funds exchanged, but not shift the supply of loanable funds curve to the right.
d. Decrease the dollar amount of loanable funds exchanged, but not shift the supply of loanable funds curve to the left.
6. If at a given interest rate, the quantity of loanable funds supplied is less than the quantity of loanable funds demanded?
a. There is a surplus of loanable funds and real interest rates will rise.
b. There is a surplus of loanable funds and real interest rates will fall.
c. There is a shortage of loanable funds and real interest rates will rise.
d. There is a shortage of loanable funds and real interest rates will fall.
7. An increase in the loanable funds demand curve would?
a. Increase real interest rates.
b. Decrease real interest rates.
c. Increase the dollar amount of loanable funds exchanged.
d. Decrease the dollar amount of loanable funds exchanged.
e. Do both a and c.
8. An increase in the supply of loanable funds would?
a. Increase real interest rates.
b. Decrease real interest rates.
c. Increase the dollar amount of loanable funds exchanged.
d. Do both a and c.
e. Do both b and c.