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Home / Questions / Exhibit Q-3 shows the market for loanable funds. If the rate of interest is 8 percent, the

Exhibit Q-3 shows the market for loanable funds. If the rate of interest is 8 percent, the

Exhibit Q-3 shows the market for loanable funds. If the rate of interest is 8 percent, there
                            would be a(n)

a.excess supply of loanable funds to the market

b.excess demand for loanable funds in the market

c.surplus of loanable funds in the market

d.equilibrium in the market

e.quantity supplied of loanable funds that exceeds the quantity demanded

32.              Exhibit Q-3 shows the market for loanable funds. If the rate of interest is 11 percent,
                            there would be a(n)

a.excess supply of loanable funds to the market

b.excess demand for loanable funds in the market

c.shortage of loanable funds in the market

d.equilibrium in the market

e.quantity demanded of loanable funds that exceeds the quantity supplied

33.              Which of the following could cause the supply curve of loanable funds to shift to the left?

a.decrease in productivity

b.increase in the rate of interest

c.decrease in the rate of interest

d.increase in productivity

e.expectation that future prices will increase

34.              Which of the following could cause the supply curve of loanable funds to shift to the
                            right?

a.increase in productivity

b.increase in the rate of interest

c.decrease in the rate of interest

d.decrease in productivity

e.expectation that future prices will decrease

35.              If the supply of loanable funds decreases,

a.more loanable funds will be made available in the loanable funds market

b.the rate of interest will increase

c.the rate of interest will decrease

d.the demand for loanable funds will increase

e.the supply curve will shift to the right

36.              If the interest rate is 10 percent, what is the present value of an asset that yields an annual
                            return of $10,000?

a.$1,000

b.$10,000

c.$1,000,000

d.$100,000

e.not enough information to determine

37.              The present value of an asset and the rate of interest

a.are not related

b.are related inversely

c.cannot change in opposite directions

d.are equivalent

e.are directly related

38.              Suppose you were given a gift of a gold mine that generates $1,000 of net income every
                            year, indefinitely. And suppose the equilibrium rate of interest is 5 percent. What is the
                            present value of that gold mine?

a.$20,000

b.$5,000

c.$50,000

d.$500,000

e.$10,000

39.              If Mary invests $500 and receives yearly interest of $40, the rate of interest she is earning
                            on her $500 must be

a.18 percent

b.12.5 percent

c.10 percent

d.15 percent

e.8 percent

40.              If Sam’s $800 earns him a 6 percent rate of interest, each year he receives

a.$480

b.$48

c.$4.80

d.$80

e.$75

Dec 12 2019 View more View Less

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