Question

Which statement most accurately describes loanable funds?

Question 11 options:

	The source of the supply of loanable funds is saving and the source of demand for loanable funds is investment.
	The source of the supply of loanable funds is investment and the source of demand for loanable funds is saving.
	The source of the supply of loanable funds and the demand for loanable funds is saving.
	The source of the supply of loanable funds and the demand for loanable funds is investment.

Question 12 (1 point)

Suppose that Parliament were to introduce a new investment tax credit. What would happen in the market for loanable funds?

Question 12 options:

	The demand for loanable funds would shift left, and interest rates would fall.
	The demand for loanable funds would shift right, and interest rates would rise.
	The supply of loanable funds would shift left, and interest rates would rise.
	The supply of loanable funds would shift right, and interest rates would fall.

Question 13 (1 point)

Private saving is the tax revenue that the government has left after paying for its spending; public saving is the income that households have left after paying for taxes and consumption.

Question 13 options:

	True
	False

Question 14 (1 point)

When opening a restaurant, you may need to buy tables, an oven, and credit card processing equipment. What do economists call these expenditures?

Question 14 options:

	investment in human capital
	savings depletion
	business consumption expenditures
	capital investment

Question 15 (1 point)

Which statement best describes a characteristic of a bond?

Question 15 options:

	The maturity of a bond refers to the amount to be paid back.
	A bond buyer cannot sell a bond before it matures.
	The principal of the bond refers to the person buying the bond.
	The interest paid by a bond depends on its price.

Answer 1

11. Ans - The source of the supply of loanable funds is saving and the source of demand for loanable funds is investment

12. Ans - The demand for loanable funds would shift right, and interest rates would rise.

Explanation:

When new investment tax credit is introduced it emans that now the investment become more lucurative as it will increase the demand for investment because of this investment tax credit and lead to increase in interest rate too.

13. Ans - False

Explanation:

Public saving is the tax revenue that the government has left after paying for its spending while private saving is the income that households have left after paying for taxes and consumption.

14. Ans - capital investment

15. Ans - The interest paid by a bond depends on its price

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