Question : 21) The demand for loanable funds curve shows the relationship : 1240403

21) The demand for loanable funds curve shows the relationship between the quantity of loanable funds demanded and

A) the real interest rate.

B) the price level.

C) the capital stock.

D) depreciation.

E) the expected rate of profit.

22) The demand for loanable funds curve shows the

A) negative relationship between the interest rate and the quantity of loanable funds demanded.

B) positive relationship between the interest rate and the quantity of loanable funds demanded.

C) negative relationship between the demand for loanable funds curve and the supply of loanable funds curve.

D) positive relationship between the demand for loanable funds curve and the supply of loanable funds curve.

E) U-shaped relationship between the interest rate and the quantity of loanable funds demanded.

23) The demand for loanable funds curve illustrates

A) the quantity of loanable funds demanded at any given level of disposable income.

B) the quantity of loanable funds demanded at any given level of the real interest rate.

C) the quantity of loanable funds supplied to the loanable funds market at any given level of disposable income.

D) how the quantity of loanable funds demanded changes when the people’s expectations about their future income changes.

E) how the quantity of loanable funds demanded changes when wealth changes.

24) The demand for loanable funds curve shows that the higher the real interest rate, the

A) smaller the quantity of loanable funds demanded.

B) smaller the demand for loanable funds.

C) larger the quantity of loanable funds demanded.

D) larger the demand for loanable funds.

E) more the loanable funds demand curve shifts leftward.

25) The demand for loanable funds curve slopes downward because the

A) higher the real interest rate, the lower the cost of investment.

B) expected rate of profit is related positively to the real interest rate.

C) price of bonds and stocks is not related to the real interest rate.

D) real interest rate is the opportunity cost of investment.

E) expected rate of profit is factor that “rewards” firms for their investment.

26) If the real interest rate falls, there is

A) an upward movement along the demand for loanable funds curve.

B) a downward movement along the demand for loanable funds curve.

C) a rightward shift of the demand for loanable funds curve.

D) a leftward shift of the demand for loanable funds curve.

E) a leftward shift of the supply of loanable funds curve.

27) Which of the following occurs if the real interest rate falls?

A) The demand for loanable funds increases and the demand for loanable funds curve shifts rightward.

B) The demand for loanable funds decreases and the demand for loanable funds curve shifts leftward.

C) The quantity of loanable funds demanded increases and there is a movement down along the demand for loanable funds curve.

D) The quantity of loanable funds demanded decreases increases and there is a movement up along the demand for loanable funds curve.

E) The quantity of loanable funds demanded increases and the demand for loanable funds curve shifts rightward.

28) A fall in the real interest rate brings a

A) movement down along the demand for loanable funds curve but no shift in the curve.

B) rightward shift of the demand for loanable funds curve but no movement along the curve.

C) movement up along the demand for loanable funds curve.

D) leftward shift of the demand for loanable funds curve.

E) movement down along the demand for loanable funds curve and a rightward shift of the demand for loanable funds curve.

29) In a business cycle recession, which of the following occurs?

A) Investment demand increases and the demand for loanable funds curve shifts rightward.

B) Investment demand decreases and the demand for loanable funds curve shifts leftward.

C) The quantity of investment demanded increases and there is a movement down along the demand for loanable funds curve but no shift in the curve.

D) The quantity of investment demanded decreases increases and there is a movement up along the demand for loanable funds curve but no shift in the curve.

E) The quantity of investment demanded decreases and there is a rightward shift of the demand for loanable funds curve.

30) During a recession, firms’ expected profit from investment ________ so the demand for loanable funds curve ________.

A) falls; shifts rightward

B) falls; shifts leftward

C) rises; shifts rightward

D) rises; shifts leftward

E) falls; does not shift