Table investment projects reference table investment

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11. Table: Investment ProjectsReference: Ref 10-14(Table: Investment Projects) Look at the table Investment Projects. If the marketinterest rate declines from 15% to 13%, then the amount of investment demanded will increase by:$1,000.$200.$2,000.$2,200.
12. A business will be likely to borrow to fund projects if:
13. The Fisher effect states that:
14. An amount that would equal a particular future value if deposited today at the prevailing interest rate is the:
15. The present value of a $110 payment in one year, given an annual 10% interest rate, is:$10.$11.$100.$110.
16. Suppose that Jim just got a $20,000 loan from his credit union to buy a new car. The loan is a _____ for Jim and a _____ for the credit union.
17. An important advantage of bonds as a financial asset is that they:
18. One reason financial institutions become very large is to:
19. The accompanying graph shows the market for loanable funds. Using copy tools, illustrate how the market would be affected by an increase in the government's budget deficit. Label the new curve(s) appropriately. Then use the double drop line tool to plot the new equilibrium (label it E2).
20. The government of Investland wants to provide incentives to private investment. The government plans to provide an investment tax credit to private businesses that will spend at least $10 million dollars to build new factories or buy new machines over the next two years. The plan is expected to increase private investment by $50 billion dollars over the next two years. Assume that the government makes appropriate changes in its spending programs so that the budget deficit remains unchanged.The current demand (D) and supply (S) curves for loanable funds in Investland are provided in the graph below. The current equilibrium interest rate and the quantity of loanable funds are 13.33% and 333.3 billion dollars respectively. This equilibrium point is designated as point E.Using the copy tool, draw a new demand and/or supply curve for loanable funds to demonstrate the effect of such a tax policy. Label the new curves as D2 and/or S2. Use a double drop-line to illustrate the new equilibrium interest rate and equilibrium quantity of loanable funds for Investland and label it E2.

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