WorksheetsSaving and Invesments
Total questions: 10
Worksheet time: 6mins
In a small closed economy investment is $50 billion and private saving is $45 billion. What are public saving and national saving?
$5 billion and $45 billion
-$5 billion and $45 billion
A. $5 billion and $50 billion
-$5 billion and $50 billion
The slope of the demand for loanable funds curve represents the
positive relation between the real interest rate and investment
negative relation between the real interest rate and investment
positive relation between the real interest rate and saving
negative relation between the real interest rate and saving
Other things the same, a higher interest rate induces people to
save more, so the supply of loanable funds slopes upward
save less, so the supply of loanable funds slopes downward
invest more, so the supply of loanable funds slopes upward
invest less, so the supply of loanable funds slopes downward
If the quantity of loanable funds demanded exceeds the quantity of loanable funds supplied
there is a surplus and the interest rate is above the equilibrium level
there is a surplus and the interest rate is below the equilibrium level
there is a shortage and the interest rate is above the equilibrium level
there is a shortage and the interest rate is below the equilibrium level
The real interest rate is the
interest rate corrected for inflation
interest rate as usually reported by banks
difference between the interest rate charged by banks on the loans they make and the interest rate paid by banks to their depositors
difference between the average dividend yield on stocks and the average interest rate on bonds
If the government institutes policies that diminish incentives to save, then in the loanable funds market
the demand for loanable funds shifts rightward
the demand for loanable funds shifts leftward
the supply of loanable funds shifts rightward
the supply of loanable funds shifts leftward
Other things the same, a government budget deficit
reduces public saving, but not national saving
reduces national saving, but not public saving
reduces both public and national saving
reduces neither public saving nor national saving
An increase in the budget deficit would cause a
shortage of loanable funds at the original interest rate, which would lead to falling interest rates
surplus of loanable funds at the original interest rate, which would lead to rising interest rates
shortage of loanable funds at the original interest rate, which would lead to rising interest rates
surplus of loanable funds at the original interest rate, which would lead to falling interest rates
Crowding out occurs when investment declines because
a budget deficit makes interest rates rise
a budget deficit makes interest rates fall
a budget surplus makes interest rates rise
a budget surplus makes interest rates fall
Which of the following expressions must be equal to national saving for a closed economy?
Y - I - G -NX
Y - C – G
Y - I - C
G + C – Y
