The supply of loanable funds curve is
a. upward sloping because fewer people are persuaded to forgo current consumption as the interest rate rises
b. downward sloping, showing that more investment will be undertaken as inflation decreases
c. upward sloping because the opportunity cost of goods and services that must be forgone increases
d. downward sloping, showing that as more funds are made available, the risk cost of loaning funds decreases
e. usually horizontal
C
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Modern banks in the United States can keep reserves as:
A. commodity money only. B. a deposit at the Federal Reserve. C. gold. D. in accounts with other banks.
Suppose that Tom bought a bike from Helen for $195. If Helen's reservation price was $185, and Tom's reservation price was $215, the buyer's surplus from this transaction was:
A. $20 B. $195 C. $215 D. $10