Work It Out

Chapter 29 (Chapter 9 Macro)

TABLE OF CONTENTS

Question 1 of 4

Work It Out

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You must read each slide, and complete any questions on the slide, in sequence.

What happens to the interest rate in the market for loanable funds if the media convinces the public that the world will end in the next year?

What would happen to the supply of loanable funds?

Supply would remain unchanged.

Supply would decrease.

Supply would increase.

What would happen to the demand for loanable funds?

Demand would remain unchanged.

Demand would decrease.

Demand would increase.

What would happen to the equilibrium interest rate in the market for loanable funds?

Interest rates would fall.

Interest rates would rise.

Interest rates would remain unchanged.

1:12

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What happens to the interest rate in the market for loanable funds if a pharmaceutical breakthrough increases life expectancy to 100 years?

What would happen to the supply of loanable funds?

Supply would decrease.

Supply would increase.

Supply would remain unchanged.

What would happen to the demand for loanable funds?

Demand would decrease.

Demand would remain unchanged.

Demand would increase.

What would happen to the equilibrium interest rate in the market for loanable funds?

Interest rates would remain unchanged.

Interest rates would fall.

Interest rates would rise.

1:13

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What happens to the interest rate in the market for loanable funds if geologists discovered vast new oil deposits under the South Pole, which would require extremely large up-front capital expenses to unearth?

What would happen to the supply of loanable funds?

Supply would decrease.

Supply would remain unchanged.

Supply would increase.

What would happen to the demand for loanable funds?

Demand would remain unchanged.

Demand would increase.

Demand would decrease.

What would happen to the equilibrium interest rate in the market for loanable funds?

Interest rates would rise.

Interest rates would fall.

Interest rates would remain unchanged.

1:20

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What happens to the interest rate in the market for loanable funds if there is a business downturn and general pessimism about the future?

What would happen to the supply of loanable funds?

Supply would decrease.

Supply would increase.

Supply would remain unchanged.

What would happen to the demand for loanable funds?

Demand would increase.

Demand would decrease.

Demand would remain unchanged.

What would happen to the equilibrium interest rate in the market for loanable funds?

Interest rates would remain unchanged.

Interest rates would fall.

Interest rates would rise.

1:10

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Question 1 of 4

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