Question

1.Unlike corporations, households cannot issue financial securities. A. True B. False 2. An increase in expected...

1.Unlike corporations, households cannot issue financial securities.

A. True

B. False

2. An increase in expected inflation would cause which of the following shifts in the loanable funds markets?

I.The demand curve to increase (shift to the right)
II.The demand curve to decrease (shift to the left)
III.The supply curve to increase (shift to right)
IV.The supply curve to decrease (shift to the left)

I only

II and IV

I, and III

I and IV

IIII only

Thank you.

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Homework Answers

Answer #1

1.household cannot issue financial securities because household are not listed and these are no separate entities so they cannot be issuing financial securities whereas Corporation can issue financial securities once they are listed on the market.

The given statement is TRUE.

2.when the increase in expected inflation will be there than demand curve as well as supply curve will be shifting upward of loanable funds.

so it will lead to demand curve to decrease that is demand curve will be shifting to the left and supply curve will also decrease then it will shift to the left also.

Correct answer will be option (b) II and IV.

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