Question : 11) If the real interest rate rises, A) the quantity of : 1238000

11) If the real interest rate rises,

A) the quantity of loanable funds demanded increases.

B) the quantity of loanable funds demanded decreases.

C) there is is movement down along the demand for loanable funds curve.

D) the demand for loanable funds curve shifts leftward.

E) the demand for loanable funds curve shifts rightward.

12) An increase in the quantity of loanable funds demanded occurs when

A) the real interest rate falls.

B) the real interest rate rises.

C) the supply of loanable funds decreases.

D) the expected profit rises.

E) wealth decreases.

13) The quantity of loanable funds demanded increases if the real interest rate falls, all other things remaining the same, because the real interest rate

A) determines the cost of living.

B) is the opportunity cost of investment.

C) affects the quantity of saving supplied.

D) is not related to the price of bonds and stocks.

E) affects the supply of saving which, in turn, determines the quantity of investment.

14) As the economy enters a strong expansion, then firms’ demand for loanable funds

A) increases because expected profit increases.

B) decreases because expected profit decreases.

C) increases because the nominal interest rate rises.

D) decreases because the nominal interest rate falls.

E) increases because the real interest rate rises.

15) Ford Motor Corporation is considering purchasing new technology that will increase productivity by twenty percent. If Ford Motor Corporation decides to make this investment at the going real interest rate, then

A) the quantity of loanable funds demanded increases.

B) the supply of loanable funds increases.

C) the demand for loanable funds increases.

D) Ford’s profits will decline.

E) saving increases.

16) The demand for loanable funds

A) increases in an expansion and decreases in a recession.

B) decreases in an expansion and increases in a recession.

C) increases if population growth declines.

D) increases if the expected rate of profit decreases.

E) increases if wealth increases.

17) Which of the following decreases the demand for loanable funds and shifts the demand for loanable funds curve leftward?

A) The real interest rate rises.

B) The economy experiences a recession.

C) Technology that increases productivity is introduced.

D) An economy experiences a rapid increase in population.

E) Wealth decreases.

18) Technological change can increase the demand for loanable funds because it

A) lowers the interest rate.

B) can increase the expected profit.

C) has little effect on production cost.

D) decreases the need for additional equipment.

E) increases people’s expected future disposable income.

19) The demand for loanable funds curve shifts in response to changes in

A) the real interest rate.

B) the amount of household savings.

C) expected profits.

D) the expected future disposable income.

E) wealth.

20) The demand for loanable funds increases if

A) technological growth slows.

B) population growth slows.

C) expected profit increases.

D) firms fear a recession.

E) wealth increases.