UNT ECON 1100 EXAM 2 CERTIFICATION
EVALUATION 2026 STUDY GUIDE
QUESTIONS AND ANSWERS
◉ According to classical growth theory, when real GDP per person
______, the population grows.
Answer: rises above the subsistence level
◉ On January 1, 2014, Sophie's Sunlounge owned 4 tanning beds
valued at $20,000.
During 2014, Sophie's bought 3 new beds at a total cost of $14
comma 000. At the end of the year, the market value of all of Sophie's
beds was $25,00.0
Calculate Sophie's gross investment and depreciation during 2014.
Answer: Sophie's gross investment during 2014 was $
14000.
Sophie's depreciation during 2014 was $
9000.
◉ A mortgage is _______.
,Answer: a legal contract that gives ownership of a home to the
lender in the event that the borrower fails to meet the agreed loan
payments (repayments and interest)
◉ The graph shows demand for loanable funds curve.
Suppose the real interest rate falls.
Draw either an arrow along the demand curve showing the direction
of change or a new demand curve.
Answer: https://gyazo.com/17b1eee62557464c854c8d2e956ccf1e
◉ When the real interest rate falls, the ______ because the ______ is the
opportunity cost of loanable funds.
Answer: quantity of loanable funds demanded increases;real
interest rate
◉ I = ______.
Answer: S + (T-G) + (M-X)
◉ The graph shows the loanable funds market when there is neither
a government budget surplus nor a government budget deficit.
Draw a point at the equilibrium quantity of loanable funds and the
equilibrium real interest rate. Label it 1.
, Now suppose that the government has a budget deficit of $1 trillion.
Draw a curve that shows the effect of this deficit in the loanable
funds market. Label it.
Draw a point at the new equilibrium real interest rate and quantity
of saving. Label it 2.
Draw a point to show investment when the government budget
deficit is $1 trillion. Label it 3.
Answer: https://gyazo.com/eee32bea6f853b2bae32f1e828cf6159
◉ The graph shows the loanable funds market when there is neither
a government budget surplus nor a government budget deficit.
Draw a point at the equilibrium quantity of loanable funds and the
equilibrium real interest rate. Label it 1.
Now suppose that the government has a budget surplus of $1
trillion.
Draw a curve that shows the effect of this surplus in the loanable
funds market. Label it.
Draw a point at the new equilibrium real interest rate and quantity
of investment. Label it 2.
EVALUATION 2026 STUDY GUIDE
QUESTIONS AND ANSWERS
◉ According to classical growth theory, when real GDP per person
______, the population grows.
Answer: rises above the subsistence level
◉ On January 1, 2014, Sophie's Sunlounge owned 4 tanning beds
valued at $20,000.
During 2014, Sophie's bought 3 new beds at a total cost of $14
comma 000. At the end of the year, the market value of all of Sophie's
beds was $25,00.0
Calculate Sophie's gross investment and depreciation during 2014.
Answer: Sophie's gross investment during 2014 was $
14000.
Sophie's depreciation during 2014 was $
9000.
◉ A mortgage is _______.
,Answer: a legal contract that gives ownership of a home to the
lender in the event that the borrower fails to meet the agreed loan
payments (repayments and interest)
◉ The graph shows demand for loanable funds curve.
Suppose the real interest rate falls.
Draw either an arrow along the demand curve showing the direction
of change or a new demand curve.
Answer: https://gyazo.com/17b1eee62557464c854c8d2e956ccf1e
◉ When the real interest rate falls, the ______ because the ______ is the
opportunity cost of loanable funds.
Answer: quantity of loanable funds demanded increases;real
interest rate
◉ I = ______.
Answer: S + (T-G) + (M-X)
◉ The graph shows the loanable funds market when there is neither
a government budget surplus nor a government budget deficit.
Draw a point at the equilibrium quantity of loanable funds and the
equilibrium real interest rate. Label it 1.
, Now suppose that the government has a budget deficit of $1 trillion.
Draw a curve that shows the effect of this deficit in the loanable
funds market. Label it.
Draw a point at the new equilibrium real interest rate and quantity
of saving. Label it 2.
Draw a point to show investment when the government budget
deficit is $1 trillion. Label it 3.
Answer: https://gyazo.com/eee32bea6f853b2bae32f1e828cf6159
◉ The graph shows the loanable funds market when there is neither
a government budget surplus nor a government budget deficit.
Draw a point at the equilibrium quantity of loanable funds and the
equilibrium real interest rate. Label it 1.
Now suppose that the government has a budget surplus of $1
trillion.
Draw a curve that shows the effect of this surplus in the loanable
funds market. Label it.
Draw a point at the new equilibrium real interest rate and quantity
of investment. Label it 2.
