UNT ECON 1100 EXAM 2 EXAM PREP GUIDE
2026 CORE ECONOMIC PRINCIPLES AND
SOLVED ITEMS
◉ An increase in current income taxes ______ the supply of loanable
funds today because it ______.
Answer: decreases; decreases disposable income, which decreases
saving
◉ A decrease in expected future income ______.
Answer: increase the supply of loadable funds today because
households with smaller expected future income will save more
today
◉ When the price of an asset rises, ______.
Answer: the interest rate falls
◉ A government budget deficit occurs, which ______.
Answer: increases the demand for loanable funds;
rises
◉ Private saving _____________ and investment
, ______________.
Answer: increase, decrease
◉ Rob takes a summer job with a landscaping firm. During the
summer, he earns an after-tax income of $4,000
and he spends $1,500 on living expenses.
Everything else remaining the same, what was the change in Rob's
wealth during the summer?
Answer: 2500
◉ The graph shows the loanable funds market.
During the 1990s, the invention and use of fiber-optic technologies
required billions of dollars to be spent laying new cables under the
oceans and launching communications satellites.
Draw a curve that shows the effect of this event. Label it.
Draw a point to show the new equilibrium quantity of loanable
funds and real interest rate.
Answer: https://gyazo.com/1a2a7c40d8d2aadbb9f1876ad6943fed
◉ A government budget surplus occurs, which increases the
__________ loanable funds
Answer: supply of
2026 CORE ECONOMIC PRINCIPLES AND
SOLVED ITEMS
◉ An increase in current income taxes ______ the supply of loanable
funds today because it ______.
Answer: decreases; decreases disposable income, which decreases
saving
◉ A decrease in expected future income ______.
Answer: increase the supply of loadable funds today because
households with smaller expected future income will save more
today
◉ When the price of an asset rises, ______.
Answer: the interest rate falls
◉ A government budget deficit occurs, which ______.
Answer: increases the demand for loanable funds;
rises
◉ Private saving _____________ and investment
, ______________.
Answer: increase, decrease
◉ Rob takes a summer job with a landscaping firm. During the
summer, he earns an after-tax income of $4,000
and he spends $1,500 on living expenses.
Everything else remaining the same, what was the change in Rob's
wealth during the summer?
Answer: 2500
◉ The graph shows the loanable funds market.
During the 1990s, the invention and use of fiber-optic technologies
required billions of dollars to be spent laying new cables under the
oceans and launching communications satellites.
Draw a curve that shows the effect of this event. Label it.
Draw a point to show the new equilibrium quantity of loanable
funds and real interest rate.
Answer: https://gyazo.com/1a2a7c40d8d2aadbb9f1876ad6943fed
◉ A government budget surplus occurs, which increases the
__________ loanable funds
Answer: supply of
