Econ Macro 24 - 24.1

A debtor is...

• the person who borrows.

• the person who lends.

Debtors need to...

• pay attention.

• pay interest.

• concentrate.

The real interest rate...

• is not fake.

• equals nominal rate, minus an adjustment for inflation.

• is the cost of capital.

• is already adjusted for inflation.

Real interest rate (r) is a change in...

• outstanding debt.

• inflation.

• purchasing power.

• government bonds.

Interest on a loan is...

• not really necessary.

• a fee for loss-of-use of that capital.

• not calculated fairly.

• a fee to punish borrowers.

The demand curve for credit slopes...

• down because a high interest rate makes borrowing expensive.

• up because a high interest rate makes borrowing expensive.

• down because a high interest rate makes borrowing cheap.

• up because a high interest rate makes borrowing cheap.

Economic agents consider __________ interest rates when making decisions.

• real

• nominal

Credit demand and supply curves can...

• shift only, not move

• move only, not shift

• move and shift

• neither move, nor shift

A "saving" consumption trade-off is when...

• people spend their own money now.

• people delay spending until a later time.

In Economics, "time preference" is ...

• how much you like time.

• whether you want something now or later.