Loanable funds theory of Interest was developed by:
Wicksell
Robert San
Ruskin
J.B.Say
Correct Answer :
A. Wicksell
Loanable funds theory of Interest? According to the Loanable Funds Theory of Interest, the rate of interest is calculated on the basis of demand and supply of loanable funds present in the capital market. The concept formulated by Knut Wicksell, the well-known Swedish economist, is among the most important economic theories. The Loanable Funds Theory of Interest advocates that both savings and investments are responsible for the determination of the rates of interest in the long run. On the other hand, short-term interest rates are calculated on the basis of the financial conditions of a particular economy. The determination of the interest rates in case of the Loanable Funds Theory of the Rate of Interest, depends essentially on the availability of loan amounts. The availability of such loan amounts is based on certain factors like the net increase in currency deposits, the amount of savings made, willingness to enhance cash balances and opportunities for the formation of fresh capitals.
Related Questions
Of the following commodities, which has the lowest price-elasticity of demand?
Car
Salt
Tea
House
The difference between accounting profits and economic profits is:
Implicit costs
Explicit costs
Fixed costs
Variable costs
Monopolistic firm can fix:
Both price and output
Either price or output
Neither price nor output
None of the above
Perfect competition assumes:
All buyers and sellers have perfect knowledge of the market
Freedom of entry of firms into the industry
Homogeneous product
All of the above
Production function shows:
Technical relationship between inputs and output
Profitability production
Relation between MR and MC
Relation between AR and AC
For monopolistic competitive firm:
P=AR and P>MR
P
P=MC and MC=AC
None of the above
Which of the following conditions is met in the long-run equilibrium in monopolistic competition, where the firm is earning only normal profits?
MC =AC and P
MC = AC and P=MR
P =MC and P
MC=MR and P =AR= ATC
Which of the following is not an explicit cost of production?
Wage of self-employed proprietor
Depreciation on machinery
Returns on owned capital
Cost of raw materials
In second degree price discrimination, monopolist takes away :
All of the consumer surplus
All of the producer surplus
Some part of the consumer surplus
None of them
Karl Marx:
Led the Russian Revolution
Provided the theoretical basis for socialism(communism)
Developed his theory in response to the Great Depression of the 1930s
None of the above
With which of the following concepts is the name of J.M.Keynes particularly associated?
Marginal propensity to consume
Marginal propensity to save
Liquidity preference
All of the above
Discriminating monopoly implies that the monopolist charges different prices for his commodity:
From different groups of consumers
For different uses
At different places
Any of the above
The word ECONOMICS is derived from the Greek terms meanings:
Political economy
Household Management
Production and consumption
Financial Accounting
The firms in non-cooperative games:
Enforce contracts
Make contracts
Make negotiations
Do not make negotiations
The largest possible loss that a firm will make in the short run is:
Zero
Its total fixed cost
Its total variable cost
Equal to one
Each firm in cournot model assumes that its competitor will:
change its output
not change its output
change its price
not change its price
Law of variable proportions is based on the assumption of:
Short period of time
Long period of time
Timeless production relationship
All of the above
According to Diamond Water Paradox diamonds are more expensive than water because:
They yield higher total utility
They yield higher marginal utility
They are more useful
None of the above
When the output of a firm is increasing, its average fixed cost:
Declines continuously
Remains constant
Rises continuously
Declines and then rises
In case of monopoly, both AR and MR fall, but MR falls:
Double to that of AR
1/2 to that of AR
2/3 to that of AR
Four times to that of AR
The Law of Equi-Marginal Utility states:
per income rupee
The least cost combination of factors x , y and z will generally be the point at which:
Price of x = Price of z Price of y Price of x
MP of x = MP of y Price of x Price of x
MP of x = MP of y = MP of z Price of x Price of y Price of z
MP of x = MP of y = MP of z
At the point where a straight line demand curve meets the quantity axis (x-axis), elasticity of demand is:
Equal to zero
Equal to one
Equal to infinite
More than one
From the resource allocation view point, perfect competition is preferable because:
The firms operate at excess capacity levels
There is a whole variety of output produced
There is no restriction on entry and exit of firms
There is no idle capacity
If price exceeds AVC but in smaller than AC at the best level of output, the firm is:
Making a profit
Incurring a loss but should continue to produce in the short-run
Incurring a loss and should stop producing immediately
Making a normal profit
A market demand curve presumes that:
All consumers are alike
Incomes of all consumers is the same
Tastes of all consumers are the same
Consumers differ in taste, incomes and other matters
For the given production function, technical efficiency is defined as:
Sets of points relating production function that maximizes output given input (labor) i.e. Q = f(L, K)
Sets of points relating production function that produces less output than possible for a given set of input (labor) i.e. Q < f(L, K)
Use of imported technology
None of the above
An increase in the supply of a commodity is caused by:
Improvements in its technology
Fall in the prices of other commodities
Fall in the prices of factors of production
All of the above
The games which played by players again and again are called:
Repeated games
Cooperative games
Non-cooperative games
Constant games
Which cost increases continuously with the increase in production?
Average cost
Marginal cost
Fixed cost
Variable cost