In the loanable funds marketMultiple Choicedemand for loanable funds shifts right if the interest rate falls.supply is vertical because loanable funds are fixed in any relevant time frame.demand is downward sloping because lowver interest rates make more capital projects profitable.demand for loanable funds shifts right in the interest rate risesSay a firm that sells its product at a price of $40 is using 20 units of capital. If the marginal product of the last unit of capital used was 50, and theconstant rental rate of capital is $2,000, then this firm shouldMultiple Choicedecrease its output.decrease the amount of capital,acquire more capital.continue to use same units of capital.In the market for loanable funds an increase in the government budget deficit willMultiple Choiceincrease the market rate of interest.decrease the market rate of interesthave no effect over the market rate of interest.increase the supply of loanable funds.The graph below shows the Chamberlin model. One would expect the demand curve facing a monopolistically competitive firm to be(Short Run)АТСQuantityA B C DMultiple Choicemore elastic than a monopoly in the same industry.less elastic than a monopoly in the same industry.as elastic as a monopoly in the same industrymore elastic than a perfectly competitive firm in the same industry.O O O OO OO O

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In the loanable funds market Multiple Choice demand for loanable funds shifts right if the interost rate falls. supply is vertical because loanable funds are fixed in any relevant time frame. demand is downward sloping because lower interest rates make more capital projects profitable. demand for loannble funds shifts right in the interest rate rises.

In the loanable funds market Multiple Choice demand for loanable funds shifts right if the interost rate falls. supply is vertical because loanable funds are fixed in any relevant time frame. demand is downward sloping because lower interest rates make more capital projects profitable. demand for loannble funds shifts right in the interest rate rises.

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter16: Labor Markets

Section: Chapter Questions

Problem 16.12P

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