Which of the following statements about the real loanable funds market is not true?
a. Movements in the real risk-free interest rate cause significant changes in borrowers' willingness and ability to tap the domestic credit market if the demand is highly inelastic.
b. The more inelastic a nation's supply of real loanable funds, the less sensitive domestic savers, banks, foreigners, and governments are to changes in the real risk-free interest rate.
c. Monetary policy is usually stronger in nations with elastic real loanable funds demands.
d. Fiscal policy is usually weaker in nations with elastic loanable funds demands.
e. All of the above are true.
Question 2 - What is a shortcoming of price control legislation?
a. Price controls lower the quantity supplied.
b. Price controls create surpluses.
c. Price controls decrease the quantity demanded.
d. All of the above are shortcomings of price controls.
Question 3 - Which of the following statements about the real loanable funds market is not true?
a. Movements in the real risk-free interest rate cause significant changes in borrowers' willingness and ability to tap the domestic credit market if the demand is highly elastic.
b. The more inelastic a nation's supply of real loanable funds, the less sensitive domestic savers, banks, foreigners, and governments are to changes in the real risk-free interest rate.
c. Monetary policy is usually stronger in nations with elastic real loanable funds demands.
d. Fiscal policy is usually weaker in nations with inelastic loanable funds demands.
e. All of the above are true.
Question 4 - Which if the following does not affect the nominal interest rate?
a. The real interest rate.
b. The current inflation rate.
c. Society's time value of money.
d. The amount of government borrowing.
e. The expected inflation rate.
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