Question :
131.Inwhichcasewouldpeopledesiretoborrowthemost?
a.thenominalinterestrateis8%andtheinflationrateis7%
b.thenominalinterestrateis7%andtheinflationrateis5%
c.thenominalinterest : 1261821
131.Inwhichcasewouldpeopledesiretoborrowthemost?
a.thenominalinterestrateis8%andtheinflationrateis7%
b.thenominalinterestrateis7%andtheinflationrateis5%
c.thenominalinterestrateis6%andtheinflationrateis3%
d.thenominalinterestrateis5%andtheinflationrateis1%
132.Supposeinsomecountrythatthefirst$5,000ofinterestincomeisexemptfromincometax.Ifthegovernmentthenremovedthisexemption
a.theinterestrateandinvestmentwouldrise.
b.theinterestratewouldriseandinvestmentwouldfall.
c.theinterestratewouldfallandinvestmentwouldrise.
d.theinterestrateandinvestmentwouldfall.
133.IfCongressinstitutedaninvestmenttaxcredit
a.itwouldmakebuyingbondsmoredesirable,sothedemandforloanablefundswouldshift.
b.itwouldmakebuyingcapitalgoodsmoredesirable,sothedemandforloanablefundswouldshift.
c.itwouldmakebuyingbondsmoredesirable,sothesupplyofloanablefundswouldshift.
d.itwouldmakebuyingcapitalgoodsmoredesirable,sothesupplyofloanablefundswouldshift.
134.Otherthingsthesame,anincreaseintaxeswithnochangeingovernmentpurchasesmakesnationalsaving
a.rise.Thesupplyofloanablefundsshiftsright.
b.rise.Thedemandforloanablefundsshiftsright.
c.fall.Thesupplyofloanablefundsshiftsleft.
d.fall.Thedemandforloanablefundsshiftsleft.
135.Otherthingsthesame,anincreaseinthebudgetdeficit
a.shiftsthedemandforloanablefundsright,sotheinterestraterises.
b.shiftsthedemandforloanablefundsleft,sotheinterestratefalls.
c.shiftsthesupplyofloanablefundsright,sotheinterestratefalls.
d.shiftsthesupplyofloanablefundsleft,sotheinterestraterises.
136.Agovernmentreducesitsbudgetdeficit,butatthesametimepeoplebecomeconcernedthattheoutlookforfuturegovernmentexpendituresandrevenuesincreasethechanceitwilldefault.Whichofthefollowingiscorrect?
a.Thereducedbudgetdeficitwillraiseinterestratesingeneral.Theincreasedriskofdefaultwillraiseinterestratesongovernmentbonds.
b.Thereducedbudgetdeficitwillraiseinterestratesingeneral.Theincreasedriskofdefaultwillreduceinterestratesongovernmentbonds.
c.Thereducedbudgetdeficitwillreduceinterestratesingeneral.Theincreasedriskofdefaultwillraiseinterestratesongovernmentbonds.
d.Thereducedbudgetdeficitwillreduceinterestratesingeneral.Theincreasedriskofdefaultwillreduceinterestratesongovernmentbonds.
137.TheU.S.governmentincreasesitsbudgetdeficit,butatthesametimeCongresseliminatesaninvestmenttaxcredit.Whichofthefollowingiscorrect?
a.Theinterestratewillincrease;investmentmayincreaseordecrease.
b.Theinterestratewilldecrease;investmentmayincreaseordecrease.
c.Theinterestratemayincreaseordecrease;investmentwilldecrease.
d.Theinterestratemayincreaseordecrease;investmentwillincrease.
138.Weinterpretthemeaningof“loanablefunds”asthe
a.flowofresourcesavailablefromprivatesaving.
b.flowofresourcesavailabletofundprivateinvestment.
c.resourcesborrowedbyprivateinvestorsandbygovernment.
d.resourceslentbyprivateinvestorsandbygovernment.
139.In2009and2010,thefederalgovernment’sbudgetdeficitwasabout
a.5percentofGDP,andthiswasthehighestdebt-GDPratioinU.Shistory.
b.10percentofGDP,andthiswasthehighestdebt-GDPratioinU.Shistory.
c.5percentofGDP,andthiswasthehighestdebt-GDPratiosinceWorldWarII.
d.10percentofGDP,andthiswasthehighestdebt-GDPratiosinceWorldWarII.
140.Ifthenominalinterestrateis2.5percentandtheinflationrateis2percent,whatistherealinterest rate?
a..5percent
b.1.25percent
c.4.5percent
d.Noneoftheaboveiscorrect.