Explain why the demand for loanable funds slopes downward and why the supply of loanable funds slopes upward
When the interest rate rises investment spending becomes more expensive, so people invest less. As the interest rate rises saving becomes more rewarding, so people want to save more. The inverse relation between interest and borrowing is reflected in the downward slope of the demand for loanable funds curve. The positive relation between interest and saving is reflected in the upward slope of the supply of loanable funds curve.
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The majority of the members of the U.S. Congress want to retain the so-called Fairness Doctrine as a control over television and radio broadcasters because
A) competition by itself cannot produce fairness. B) government oversight is required to assure equal time for conflicting points of view. C) television and radio are local monopolies to a large extent. D) the air waves belong to the public. E) the doctrine gives more power and influence to members of Congress.
Clarissa notices that her satellite TV signal becomes scrambled whenever there is a major thunderstorm in her area. She concludes that the scrambled satellite signal must be causing the severe thunderstorms. Clarissa is
A. likely correct that there is causation, but the causation is more likely running in the opposite direction in that the severe thunderstorms are the cause of the scrambled satellite signal. B. probably misguided in that there is no apparent correlation or causation in this situation. C. very probably correct in her conclusion that the scrambled satellite is the cause of the thunderstorms. D. definitely confusing correlation with causation.