Use the Following to Answer Questions

question 166

Multiple Choice

Use the following to answer questions :
Figure: Crowding Out
-(Figure: Crowding Out) Look at the figure Crowding Out. The supply of loanable funds curve S_LF1 shifts to S_LF2. This shift implies that:

• A)private savings has increased.
• B)national investment has decreased.
• C)private savings has decreased.
• D)national savings has decreased.

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Definitions:

Options Contract

A contract giving the buyer the right, but not the obligation, to buy (call option) or sell (put option) an underlying asset at a specified price on or before a certain date.

Forward Contract

A financial derivative that represents a personalized agreement to buy or sell an asset at a specific price on a future date.

Futures

Standardized contracts to buy or sell a specific asset at a predetermined price at a specified future date, used for hedging or speculation.

Forwards

A contract between two parties to buy or sell an asset at a specified price on a future date.