What happens to the supply curve for loanable funds if households become thriftier and decide to save more at each interest rate?
Explanation
This question tests the understanding of the factors that can shift the supply curve for loanable funds.
Other questions
What is the economic definition of rent?
What is the primary reason for the supply of land being perfectly inelastic?
According to the analysis of land rent, what is the sole active determinant of the amount of rent?
Why do economists consider land rent a 'surplus payment'?
What was the central argument of Henry George's single-tax movement?
What is the economic definition of interest?
According to the loanable funds theory of interest, what determines the equilibrium interest rate?
Why does the demand curve for loanable funds slope downward?
Based on the data in Table 14.1, what is the future value of $1000 after 2 years at a 10 percent interest rate, compounded annually?
What is the difference between the nominal interest rate and the real interest rate?
What is a potential consequence of a usury law that sets a maximum interest rate below the equilibrium rate?
How do economists define economic profit?
What are the three general sources of uninsurable risks that can lead to economic profits or losses?
Which of the following is an example of an explicit cost?
What role does economic profit play in resource allocation?
In the loanable funds market, who are considered the primary suppliers and demanders in the simplified model?
Which of the following is NOT a factor that causes the range of interest rates to vary?
The pure rate of interest is best approximated by the interest paid on which type of security?
What is meant by the 'time-value of money'?
In a dynamic economy, a portion of economic profit may be considered compensation for what activity?
What is the primary role of the entrepreneur in the context of economic profit?
If a firm borrows $100 and must repay $110 after one year, but the rate of inflation during that year is 10 percent, what is the real interest rate?
In a static, risk-free, and purely competitive economy, what would be the expected level of economic profit in the long run?
What is the incentive function of rent from a societal perspective?
When a firm invests in a machine that costs $100 and expects it to increase total revenue by $110 in one year, what is the expected rate of return?
How do financial institutions like banks fit into the loanable funds model?
Which source of profit is considered economically desirable from a societal perspective?
Based on the data in Table 14.1, what is the present value of $1331 to be received in 3 years, assuming a 10 percent interest rate?
What is the primary function of the interest rate in the allocation of capital?
Why might a lender prefer a 5 percent interest rate on a tax-exempt municipal bond over a 6 percent rate on a taxable corporate bond?
What are the four roles of the entrepreneur mentioned in the chapter?
Which statement best describes the relationship between rent for an individual firm and rent from a societal perspective?
If the interest rate is 8 percent, a business will borrow for an investment project if its expected rate of return is at least what percentage?
According to the income shares data presented in the text, what category makes up the dominant share of income in the U.S. economy?
What is one of the main criticisms leveled against Henry George's single-tax proposal?
Which financial decision is most directly affected by the real interest rate rather than the nominal interest rate?
What is the primary motivation for firms to engage in innovation according to the chapter?
What would cause an increase in the demand for loanable funds?
According to Table 14.2, which interest rate was the highest in January 2008?
From a societal standpoint, why is a tax on land considered efficient compared to a tax on wages?
What concept explains why land in the Las Vegas strip commands a much higher rent than land in the Nevada desert?
When a firm finances its R&D using its own retained earnings, what is the marginal cost of those funds?
What term describes the idea that a firm's profit from innovation may be reduced because competitors can copy the new product or process?
Why is the interest payment on long-term U.S. government bonds considered the best approximation of the 'pure rate of interest'?
What happens in the loanable funds market if the Federal Reserve takes action to increase the supply of money?
If a bank offers a loan of $10,000 but discounts the $1,000 interest payment in advance, giving the borrower only $9,000, what is the effective interest rate?
What is a normal profit considered to be in economics?
The Truth in Lending Act of 1968 requires lenders to state the costs and terms of consumer credit in what specific format?
If a loan of $10,000 with $1000 in interest is repaid in 12 equal monthly installments, why is the effective interest rate 20 percent and not 10 percent?