Which of the following statements about the real loanable funds market is not true?
a. Movements in the real risk-free interest rate cause significant changes in borrowers' willingness and ability to tap the domestic credit market if the demand is highly elastic.
b. The more elastic a nation's supply of real loanable funds, the less sensitive domestic savers, banks, foreigners, and governments are to changes in the real risk-free interest rate.
c. Monetary policy is usually stronger in nations with elastic real loanable funds demands.
d. Fiscal policy is usually weaker in nations with elastic loanable funds demands.
e. All of the above are true.
.B
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The rapid depreciation in the dollar from 1985 to 1987 caused net exports during this period
A) to rise as the J curve would have predicted, but with a short lag (less than one year). B) to rise as the J curve would have predicted, but with a long lag (more than one year). C) to fall as the J curve would have predicted, but with a short lag (less than one year). D) to fall as the J curve would have predicted, but with a long lag (more than one year).
A car leasing company that expands its size by buying its competitors may run the risk of increasing production cost per unit due to:
A. diseconomies of scale. B. economies of scale. C. diminishing returns. D. greater use of large-volume purchases.