Author Question: Which of the following statements about the real loanable funds market is not true? a. Movements in ... (Read 131 times)

WWatsford · **on:** Jun 30, 2018

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.

Question 2

What is a shortcoming of price control legislation?
a. Price controls create surpluses.
b. Price controls lower the quantity demanded.
c. Price controls create shortages.
d. All of the above are shortcomings of price controls.