Question : 91) The figure above shows the loanable funds market. At : 1238008

91) The figure above shows the loanable funds market. At an interest rate of

A) 4 percent, there is a surplus of loanable funds.

B) 4 percent, there is a shortage of loanable funds.

C) 8 percent, the quantity of loanable funds supplied is $14 trillion.

D) 8 percent, the quantity demanded of loanable funds is $18 trillion.

E) 6 percent, savers will exit the market because the reward to saving is too low.

92) Suppose that there is an increase in disposable income and simultaneously an increase in the expected profitability of investment. As a result, the equilibrium real interest rate ________ and the equilibrium quantity of loanable funds ________.

A) rises; increases

B) falls; increases

C) remains unchanged; increases

D) might rise, fall, or remain unchanged; increases

E) might rise, fall, or remain unchanged; decreases

93) Suppose that there is an increase in expected future disposable income and simultaneously an increase in the expected profitability of investment. As a result, the equilibrium real interest rate ________ and the equilibrium quantity of loanable funds ________.

A) rises; might increase, decrease, or not change

B) rises; increases

C) rises; decreases

D) falls; might increase, decrease, or not change

E) falls; increases

94) Suppose firms become more optimistic about the economy’s ability to avoid a recession and hence the expected profit increases. As a result, the demand for loanable funds curve shifts ________ and the real interest rate ________.

A) rightward; rises

B) rightward; falls

C) leftward; rises

D) leftward; falls

E) rightward; does not change

95) A decrease in expected profit

A) lowers the equilibrium real interest rate.

B) raises the equilibrium real interest rate.

C) increases the demand for loanable funds.

D) decreases the supply of loanable funds.

E) increases the supply of loanable funds.

96) If the real interest rate falls, other things being the same, the quantity of loanable funds demanded ________ and the quantity of loanable funds supplied ________.

A) increases; decreases

B) increases; increases

C) decreases; does not change

D) does not change; decreases

E) decreases; decreases

97) The demand for loanable funds

A) increases in a recession.

B) decreases in an expansion.

C) increases when firms are optimistic about the profit from investing in capital.

D) increases when wealth increases.

E) decreases when wealth increases.

98) Other things remaining the same, a ________ in the real interest rate ________ the quantity of saving supplied and ________ the quantity of loanable funds supplied.

A) fall; increases; increases

B) rise; increases; increases

C) fall; increases; decreases

D) fall; decreases; increases

E) rise; increases; decreases

99) An increase in wealth leads to ________ loanable funds.

A) an increase in the supply of

B) an increase in the demand for

C) a decrease in the supply of

D) a decrease in the demand for

E) no change in either the supply of loanable funds or the demand for

100) If the real interest rate falls, there is

A) an upward movement along the supply of loanable funds curve.

B) a downward movement along the supply of loanable funds curve.

C) a rightward shift of the supply curve of loanable funds and no shift in the demand for loanable funds curve.

D) a leftward shift of the supply of loanable funds curve and no shift in the demand for loanable funds curve.

E) a leftward shift of the supply of loanable funds curve and a rightward shift in the demand for loanable funds curve.

101) If, at the current interest rate, the quantity of loanable funds supplied is less than the quantity of loanable funds demanded, then

A) the supply of loanable funds curve shifts rightward and the real interest rate rises.

B) the supply of loanable funds curve shifts leftward and the real interest rate falls.

C) the real interest rate falls.

D) the real interest rate rises.

E) the supply of loanable funds curve shifts leftward and the real interest rate rises.

102) If expected profit falls, the demand for loanable funds curve shifts ________, and the real interest rate ________.

A) rightward; rises

B) rightward; falls

C) leftward; rises

D) leftward; falls

E) leftward; does not change