Credit Market A. Plot the credit demand and supply curve in a figure. Specify the equi- librium real interest rate (r*) and the equilibrium quantity of credit (B*) in your figure. B. Everything else remaining unchanged, what is likely to happen to the credit market if the following scenario occurs? Separately and graphi- cally show the change of each scenario. Specify the new equilibrium in the credit market. B.1 Businesses in the economy see scope for growth and are planning to expand production in the future. B.2 Households expect a recession in near future. B.3 The government is planning to borrow money from financial in- stitutions for investment in infrastructures.

Question 4 Suppose congress pass a law that offers a tax credit for firms that built new factories in the U.S. Then the O a. supply of loanable funds would shift rightward, initially creating a shortage of loanable funds at the original interest rate. O b. demand for loanable funds would shift rightward, initially creating a shortage of loanable funds at the original interest rate. O c. demand for loanable funds would shift rightward, initially creating a surplus of loanable funds at the original interest rate. O d. supply of loanable funds would shift rightward, initially creating a surplus of loanable funds at the original interest rate.

Question 13 Select the correct statement: Your interest rate on your loan with the credit card company can go up big O A. time if you make late payments, or go over your credit limit. Your interest rates on your loan with many credit card companies can go up O B. big time if you make late payments on other bills that have nothing to do with your credit card. Your interest rate on your loan with many credit card companies can go up C. big time for no reason at all. O D. All of the above. Question 14 Save and Quit s a really tough question. Select the correct statement: DELL 24 &

1.A firm’s external environment is divided into various subcategories that includeHintA.remote, social, and operationsB.industry, technology, and internalC.political, social, and industryD.remote, industry, and operating2.When managers consider the general availability of credit, the level of disposable income, and the propensity of people to spend, they are considering what factors?HintA.Social factorsB.Business factorsC.Political factorsD.Economic factors3.This factor considers or provides creative adaptations that can suggest possibilities for new products or for improvements in existing products or in manufacturing and marketing techniques.HintA.Industry factorB.Operations factorC.Sales factorD.Technological factor.The quasi-science of anticipating environmental and competitive changes and estimating their importance to an organizations operation refers toHintA.environmental scanningB.SWOT analysisC.business analysisD.technological forecasting5.This term refers to…

True or False: Revolving credit accounts never provide benefits to consumers. O True O False

Analyze the impacts of the economy entering a time of expansion (i.e. "good times") on the market for loanble funds. (Assume that expectations about the future don't change.) Because of the expansion, equilibrium interest rates will and the equilibrium quantity of loanable funds will O decrease ; rise, fall, or not change (ambiguous effect) O increase ; decrease O increase ; rise, fall, or not change (ambiguous effect) rise, fall, or not change (ambiguous effect) ; increase O rise, fall, or not change (ambiguous effect) ; decrease

Suppose the market for loanable funds is currently in equilibrium. Which of the following factors will cause an increase in the interest rate? Select one: O a. An increase in the household saving rate O b. An expansionary monetary policy Oc. An increase in business confidence O d. A decrease in government budget deficits Travis buys a 20-year, $10,000 US Treasury bond with a coupon rate of 5%. After three years, he has some unexpected expenses and decides to sell the bond. In which market will Travis sell his bond? Select one: O a. The secondary bond market O b. The primary bond market O c. The Treasury bond market Od. The T-bond market

Interest Rate 0 Multiple Choice O O A O S₁ BC Quantity Refer to the diagram. Suppose that the demand for loanable funds is D₁ and the supply of loanable funds initially is S₁. If the supply of loanable funds increases to So, the equilibrium quantity of funds borrowed will increase from E to F. increase from A to B. increase from B to C. So decrease from G to F. Do D₁

Predict how each of the following economic changes will affect the equilibrium price and quantity in the financial market for home loans. Which curve will shift: supply or demand? In which direction will the curve shift: right or left? (It may help to use a demand and supply diagram to conduct your analysis.)  a. The number of people at the most common ages for home-buying decreases.    b. Rents rise extremely rapidly.  c. Banks that have made home loans find that a larger number of people than they expected are not repaying those loans.  d. Because of a threat of a war, people become uncertain about their economic future.The overall level of saving in the economy diminishes.  e. The federal government changes its bank regulations in a way that makes it cheaper and easier for banks to make home loans.

Suppose the government runs fewer budget deficit and there is a decrease in the average household income. Then, O The new EQ quantity of loanable funds would be indeterminate, , but the new EQ interest rate would increase. O The new EQ quantity of loanable funds would decrease, but the new EQ interest rate would be indeterminate. O The new EQ quantity of loanable funds would be indeterminate, , but the new EQ interest rate would decrease. The new EQ quantity of loanable funds would be indeterminate, but the new EQ interest rate would increase. The new EQ quantity of loanable funds would increase, but the new EQ interest rate would be indeterminate.