1) The slope of the supply of loanable funds curve representsthe

Select one:

a. positive relation between the real interest rate andinvestment.

b. positive relation between the real interest rate andsaving.

c. positive relation between the nominal interest rate andinvestment.

d. positive relation between the nominal interest rate andsaving.

2) In Imaginaryland, the supply curve of loanable funds is Qs =1000*r + 2, the demand curve of loanable funds is Qd = -10*r + 100.Suppose that the current nominal interest rate is 10%, and thepercentage change of GDP deflator from the last year is 4%. Whatare the equilibrium level of loanable funds and the current levelsof supply and demand of the loanable funds respectively?

Select one:

a. 99.03; 62; 99.4

b. 98; 142; 98.6

c. 99.03; 102; 99

d. 98; 58; 100.6

3)Which of the following are characteristics of bonds?

i. Bonds are certificates of indebtedness.

ii. Bonds are purchased through auctions.

iii. Bonds can be resold in secondary bond markets.

iv. Bonds represent ownership of a corporation.

Select one:

a. only i, ii, and iii

b. only i, iii, and iv

c. all four

d. only ii, iii, and iv.

4)Which of the following is NOT true about mutual funds?

Select one:

a. Mutual funds typically hold a wide assortment of stocksand/or bonds.

b. Mutual funds typically accept deposits and allow depositorsto write checks on their deposits.

c. Mutual funds allow people with limited funds todiversify.

d. Mutual funds pool together the money of many differentsavers.

5)What would happen in the market for loanable funds if thegovernment were to decrease the tax on interest income?

Select one:

a. There would be no change in the amount of loanable fundsborrowed.

b. There would be an increase in the amount of loanable fundsborrowed.

c. There would be a reduction in the amount of loanable fundsborrowed.

d. The change in loanable funds borrowed would be ambiguous.

6) In a small closed economy investment is $10 billion andprivate saving is $15 billion. What are public saving and nationalsaving, respectively?

Select one:

a. $5 billion and $5 billion

b. $25 billion and $10 billion

c. None of the other answers.

d. -$5 billion and $10 billion

7)

Which of the following shows assets in order from least togreatest risk?

Select one:

a. bond; stock portfolio; cash; single stock

b. cash; bond; stock portfolio; single stock

c. bond; cash; single stock; stock portfolio

d. cash; single stock; bond; stock portfolio

8)What was the US 10-year treasury rate in November 2017?

Select one:

a. 4.26%

b. 2.60%

c. 0.31%

d. 2.35%

Answer rating: 100% (QA)

1 The slope of the supply of loanable funds curve represents the positive relation between the real interest rate and saving This is because when the real interest rate increases the cost of borrowing ... View the full answer