Author Question: The demand for loanable funds curve slopes downward because the A) expected rate of profit is ... (Read 114 times)

cdr_15 · **on:** Jun 29, 2018

The demand for loanable funds curve slopes downward because the

A) expected rate of profit is related positively to the real interest rate.
B) real interest rate is the opportunity cost of investment.
C) price of bonds and stocks is not related to the real interest rate.
D) higher the real interest rate, the lower the cost of investment.
E) expected rate of profit is factor that rewards firms for their investment.

Question 2

The figure above shows a production possibilities frontier. In the figure, which of the following combinations of the two goods are efficient?

A) 4 million cell phones and 4 million DVDs
B) 2 million cell phones and 13 million DVDs
C) 5 million cell phones and 15 million DVDs
D) no cell phones and 15 million DVDs
E) None of these combinations is efficient.