Question : 41) The supply of loanable funds from A) households and : 1240405

41) The supply of loanable funds is from

A) households and the government if it has a budget surplus.

B) households and the government if it has a budget deficit.

C) firms and the government if it has a budget surplus.

D) firms and the government if it has a budget deficit.

E) households and firms.

42) The quantity of loanable funds supplied increases if the real interest rate rises, all other things remaining the same, because the

A) real interest rate is the opportunity cost of saving.

B) real interest rate is the opportunity cost of consumption.

C) cost of living is determined by the real interest rate.

D) real interest rate is inversely related to the cost of buying on credit.

E) demand for investment increases when the real interest rate rises.

43) The quantity of loanable funds supplied increases if the ________, all other things remaining the same, because the ________.

A) real interest rate rises; real interest rate is the opportunity cost of saving

B) real interest rate rises; real interest rate is the opportunity cost of consumption

C) real interest rate rises; cost of living is determined by the real interest rate

D) real interest rate falls; real interest rate is the opportunity cost of consumption

E) real interest rate falls; real interest rate is the opportunity cost of saving

44) The real interest rate is ________ related to the supply of loanable funds because ________.

A) positively; the opportunity cost of consumption expenditure increases as the real interest rate rises

B) negatively; the opportunity cost of consumption expenditure increases as the real interest rate rises

C) positively; people are motivated to increase their consumption expenditure as the real interest rate rises

D) negatively; people are motivated to save more as the real interest rate rises

E) None of the above answers is correct.

45) If the real interest rate falls, people decide to ________ because the opportunity cost of ________.

A) increase their consumption expenditure; saving has decreased

B) increase their consumption expenditure; consumption has decreased

C) decrease their consumption expenditure; consumption has decreased

D) save more; saving has decreased

E) None of the above answers is correct.

46) If the interest rate on student loans ________, students will ________.

A) rises from 6 percent to 12 percent; increase their saving in order to pay back the loan sooner

B) rises from 6 percent to 12 percent; increase their consumption before it becomes too expensive

C) falls from 6 percent to 1 percent; increase their saving in order to pay back the loan sooner

D) falls from 6 percent to 1 percent; not change their saving but will change their investment

E) None of the above answers is correct.

47) Increasing savings and ________ go hand in hand because they both ________.

A) decreasing expenditures; are the result of an increase in real interest rates on the loanable funds market

B) decreasing expenditures; are the result of an increase in nominal interest rates on the loanable funds market

C) increasing expenditures; are the result of an increase in real interest rates on the loanable funds market

D) increasing expenditures; are the result of an increase in nominal interest rates on the loanable funds market

E) None of the above answers is correct.

48) The supply of loanable funds schedule shows that the

A) higher the real interest rate, the greater the quantity of loanable funds supplied.

B) higher the real interest rate, the greater the opportunity cost of supplying loanable funds.

C) higher the real interest rate, the lower the profit from making new investment.

D) lower the real interest rate, the greater the quantity of loanable funds supplied.

E) higher the real interest rate, the more the supply of loanable funds curve shifts rightward.

49) An increase in the real interest rate

A) has no effect on the loanable funds.

B) increases the quantity of loanable funds supplied.

C) increases current consumption.

D) decreases the quantity of loanable funds supplied.

E) shifts the supply of loanable funds curve rightward.

50) As the real interest rate rises, the quantity of loanable funds supplied ________ and the quantity of loanable funds demanded ________.

A) increases; increases

B) increases; decreases

C) decreases; increases

D) decreases; decreases

E) does not change; does not change