Question :
81) Refer to Figure 15-2. The market for financial capital : 1384303
81) Refer to Figure 15-2. The market for financial capital is initially in equilibrium at E1. A shift of the aggregate investment demand curve from I1 to I2, all other things constant, would
A) shift the supply of saving curve to S2.
B) change the technology of capital use.
C) decrease the equilibrium interest rate.
D) increase the equilibrium interest rate.
E) reduce the marginal product of capital.
82) Refer to Figure 15-2. The market for financial capital is initially in equilibrium at point E1. A shift of the aggregate saving supply curve from S1 to S2, all other things being equal, would
A) shift the investment demand curve to I2.
B) change the technology of capital use.
C) decrease the equilibrium interest rate.
D) increase the equilibrium interest rate.
E) reduce the marginal product of capital.
83) Refer to Figure 15-2. The market for financial capital is initially in equilibrium at point E1. If the marginal product of capital increases, all other things being equal, the
A) investment demand curve will shift to I2 and the new equilibrium will be E4.
B) supply of saving curve will shift to S2 and the new equilibrium will be E2.
C) investment demand curve will shift to I2, the supply of saving will shift to S2, and the new equilibrium will be E3.
D) the equilibrium will remain at E1.
E) the supply of saving curve will shift to S2 and new equilibrium will be E2.
84) Refer to Figure 15-2. The market for financial capital is initially in equilibrium at point E1. If the government then institutes a policy that encourages individuals to increase their desired saving,
A) the equilibrium interest rate falls and the amount of investment increases.
B) the equilibrium interest rate falls but the amount of investment is unchanged.
C) the flow of investment and saving both increase in the new equilibrium, but the interest rate is unaffected.
D) the flow of investment and saving both increase, and the equilibrium interest rate increases.
E) the equilibrium interest rate rises, and the amount of investment decreases.
85) Refer to Figure 15-2. The market for financial capital is initially in equilibrium at point E1. If the government then institutes a policy that encourages firms to increase their desired investment,
A) the equilibrium interest rate falls and the amount of investment increases.
B) the equilibrium interest rate falls but the amount of investment is unchanged.
C) the flow of investment and saving both increase in the new equilibrium, but the interest rate is unaffected.
D) the flow of investment and saving both increase, and the equilibrium interest rate increases.
E) the equilibrium interest rate rises and the amount of investment decreases.
86) Refer to Figure 15-2. The market for financial capital is initially in equilibrium at point E1. If the government then institutes a policy that encourages individuals to decrease the fraction of their income that they consume,
A) the equilibrium interest rate falls and the amount of investment increases.
B) the equilibrium interest rate falls but the amount of investment is unchanged.
C) the flow of investment and saving both increase in the new equilibrium, but the interest rate is unaffected.
D) the flow of investment and saving both increase, and the equilibrium interest rate increases.
E) the equilibrium interest rate rises and the amount of saving increases.
87) Refer to Figure 15-2. Suppose the economy begins at point E1. If technology changes in a way that increases the marginal product of capital, which movement best depicts the change in equilibrium in the market for financial capital?
A) E1 to E2
B) E1 to E3
C) E1 to E4
D) E3 to E2
E) E4 to E2
88) Refer to Figure 15-3. Suppose the current equilibrium in the market for financial capital is at point A. Which of the following events is likely to move the equilibrium to point B?
A) a reduction in the interest rate
B) an increase in the interest rate
C) an increase in current household income
D) an increase in expected future income
E) a decrease in the marginal product of capital
89) Refer to Figure 15-3. Suppose the current equilibrium in the market for financial capital is at point A. Which of the following events is likely to move the equilibrium to point D?
A) a technological improvement
B) an increase in the interest rate
C) a decrease in the interest rate
D) population growth
E) a reduction in the marginal product of capital
90) Refer to Figure 15-3. Suppose the current equilibrium in the market for financial capital is at point D. Which of the following events is likely to move the equilibrium to point A?
A) an increase in the interest rate
B) a decrease in the interest rate
C) a technological improvement
D) the introduction of a policy that encourages saving
E) growth in average household income
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