11. f the fiederal govemment needs to bomow additional funds, this boowing additional fundshis orrewing reflects aln)is funds, and e no change, increase d no change: decrae 12. Due to espectations of higher inflation in the utare, we would typically expect the sapply of a increase, decrease 13. If economic expansion is expected to decrease, the demand for loanable funds should and b. increase; dacrease decrease, decrease d decrease, increase 14. If the real interest eate was stable over time, this would suggest that there isrelationship between inflation and sominal interest rate mmovements. a. a positive d an uncertain (cannot be determined from information above) 15. Which of the following is not true regarding foreign innerest rates? a The large low of funds between countries cases interest raes in any given country to become more susooptible to imerest rae movements in b The expectatoes of a song dollar should cause a few of funds to the US c. Am increase in a forcign country's interest rates will encourage investors in that country to invest their funds in other countries d. All of the above are true regarding foreign intcrest tates 16 Which of tdhe following statements is incormect? The Fed's monetary policy is imiendod to centrol the economic conditions in the US. b. The Fed's monetary policy afectstheply of oanable fm wih interest rates e.By influencing interest rates, the Fod is able so influence the amount of money that coeporations and houscholds are willing to borrow and spend All of the statements above are truc. d. 17. The expected impact of an increasod expansion by businesses is an shift in the demand schedule andin the supply schedule. . inward; an inward shift b. inaard; an outward shift c. outward, an inward shift d. outward; no obvious change from the for that period 18. The rcal interest rate can be foreeasted by subtracting the a nominal interest rate, expected inflation rate b. prime rate; nominal interest rate expected inflation rate, nominal interest rate d. prime rate; expectod iflation rale c. 19. As the supply of funds in the banking systemthe federal funds rate a increases; declines b. increases; increases c, declines, declines d. none of the above