FIN 341 Exam 1 (ch 2) UPDATED ACTUAL Questions And Correct Answers
Terms in this set (25)
At any point in time, households and businesses demand True
a greater quantity of loanable funds at lower rates of
interest.
The business demand for funds resulting from short-term False
investments is inversely related to the number of projects
implemented and inversely related to the interest rate.
The federal government demand for loanable funds is False
said to be interest elastic.
Other things being equal, a smaller quantity of U.S. funds False
would be demanded by foreign governments and
corporations if their domestic interest rates were high
relative to U.S. rates.
In general, suppliers of loanable funds are willing to True
supply more funds if the interest rate is higher.
If the aggregate demand for loanable funds increases False
without a corresponding increase in aggregate supply,
there will be a surplus of loanable funds.
According to your text, while the expected impact of an True
increased expansion by businesses is an outward shift in
the demand schedule, there is no obvious change in the
supply schedule.
According to the Fisher effect, if the real interest rate is True
zero, the nominal interest rate must be equal to the
expected inflation rate.
A higher federal government deficit increases the True
quantity of loanable funds demanded at any prevailing
interest rate, causing an outward shift in the demand
schedule.
Forecasters should consider future plans for corporate True
expansion and the future state of the economy when
forecasting business demand for loanable funds.
The ________ suggests that the market interest rate is loanable funds theory
determined by factors that control the supply of and
demand for loanable funds.
Terms in this set (25)
At any point in time, households and businesses demand True
a greater quantity of loanable funds at lower rates of
interest.
The business demand for funds resulting from short-term False
investments is inversely related to the number of projects
implemented and inversely related to the interest rate.
The federal government demand for loanable funds is False
said to be interest elastic.
Other things being equal, a smaller quantity of U.S. funds False
would be demanded by foreign governments and
corporations if their domestic interest rates were high
relative to U.S. rates.
In general, suppliers of loanable funds are willing to True
supply more funds if the interest rate is higher.
If the aggregate demand for loanable funds increases False
without a corresponding increase in aggregate supply,
there will be a surplus of loanable funds.
According to your text, while the expected impact of an True
increased expansion by businesses is an outward shift in
the demand schedule, there is no obvious change in the
supply schedule.
According to the Fisher effect, if the real interest rate is True
zero, the nominal interest rate must be equal to the
expected inflation rate.
A higher federal government deficit increases the True
quantity of loanable funds demanded at any prevailing
interest rate, causing an outward shift in the demand
schedule.
Forecasters should consider future plans for corporate True
expansion and the future state of the economy when
forecasting business demand for loanable funds.
The ________ suggests that the market interest rate is loanable funds theory
determined by factors that control the supply of and
demand for loanable funds.
