Question 1

An increase in an investment tax credit would create a

Accepted Answer

A)  shortage at the former equilibrium interest rate.This shortage would lead to a rise in the interest rate.
B)  shortage at the former equilibrium interest rate.This shortage would lead to a fall in the interest rate.
C)  surplus at the former equilibrium interest rate.This surplus would lead to a rise in the interest rate.
D)  surplus at the former equilibrium interest rate.This surplus would lead to a fall in the interest rate.

Question 2

An increase in the budget deficit would cause a

Accepted Answer

A)  shortage of loanable funds at the original interest rate, which would lead to falling interest rates.
B)  surplus of loanable funds at the original interest rate, which would lead to rising interest rates.
C)  shortage of loanable funds at the original interest rate, which would lead to rising interest rates.
D)  surplus of loanable funds at the original interest rate, which would lead to falling interest rates.

Exam 26: Saving, investment, and the Financial System

An increase in an investment tax credit would create a

Correct Answer
verified

An increase in the budget deficit would cause a

Correct Answer
verified

Exam 26: Saving, investment, and the Financial System

An increase in an investment tax credit would create a

Correct AnswerverifiedShow Answer

An increase in the budget deficit would cause a

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified