Question

Question 9 2.5 pts

The price paid for money is

Group of answer choices

the actual payment made by the borrower to the lender.

the amount borrowed from the lender.

the interest rate charged by the lender.

the principal and interest rate charged by the lender.

There is no price paid for money as it is not for sale.

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Question 10 2.5 pts

When the supply of money saved exceeds the demand for money, then banks will

Group of answer choices

increase interest rates to attract more savers.

lower interest rates to discourage savers.

put money on sale by making loans more attractive.

both increase interest rates to attract more savers and lower interest rates to discourage savers .

both lower interest rates to discourage savers and put money on sale by making loans more attractive.

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Question 11 2.5 pts

The four basic factors that affect the price paid (interest rate) for money are

Group of answer choices

the demand for money saved, the demand for borrowed funds, Federal Reserve policy, and risk.

the demand for money saved, the supply for borrowed funds, Federal Reserve policy, and risk.

the supply of money saved, the demand for borrowed funds, Federal Reserve policy, and risk.

the supply of money saved, the supply for borrowed funds, Federal Reserve policy, and risk.

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Question 12 2.5 pts

When the Federal Reserve increases the interest rate it charges banks to borrow reserves, it is controlling the money supply by using which of the following tools?

Group of answer choices

discount rate

open market operations

reserve requirements ratio

risk

unable to tell with the information provided

Answer 1

9) The Price paid for money => C) The interest rate charged by the lender

Because when one borrows money from others he has to pay an amount called interest. It is the "Price" paid for that money. This interest can be higher or lower on the basis of risk associated with the person to whom lender giving his money.

- If a borrower has a good credit record he will get money at lesser price or interest. Here chances of getting that money back are higher. So, the associated risk is lower.

- If a borrower has a bad credit record he will get money at higher price or interest. Here chances of getting that money back are lower. So, the associated risk is higher.

10) When the supply of money saved exceeds the demand for money, then banks will  

  => B) Lower interest rates to discourage savers

(Supply exceeds demand, so now they don't need that much amount in savings. Because saving causes expenses)

11) The four basic factors that affect the price paid (interest rate) for money are

=> C) The supply of money saved, the demand for borrowed funds, Federal Reserve policy, and risk

12) When the Federal Reserve increases the interest rate it charges banks to borrow reserves, it is controlling the money supply by using which of the following tools?

=> C) Reserve Requirements Ratio

Hope, it helps :)