1. If banks increase their supply of funds to the market for loanable funds, what will happen to the interest rate?

A. The interest rate will rise (wrong)

B. The interest rate will fall

C. Nothing will happen to the interest rate

2. The market for loanable funds refers to:

A. The market in which banks swap government bonds for cash with the Federal Reserve Bank

B. The market in which money is loaned and borrowed

C. The market in which final goods and services are exchanged

D. The market in which tax revenues are converted to government expenditures

3. Which of the following is true of the relationship between bonds issued by a corporation and bonds purchased from the corporation by a bank?

A. bonds issued by a corporation are a liability of the corporation and also a liability of the bank that buys them

B. bonds issued by a corporation are an asset of the corporation and also an asset of the bank that buys them

C. bonds issued by a corporation are an asset of the corporation and a liability of the bank that buys them

D. bonds issued by a corporation are a liability of the corporation and an asset of the bank that buys them