Private Investment and Real Interest Rates

Instructions:

Choose an answer and hit 'next'. You will receive your score and answers at the end.

question 1 of 3

What is the most important determinant of saving?

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1. What is directly connected with taking a loan for private investment in the market for loanable funds?

2. When does investment demand increase?

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About This Quiz & Worksheet

Focusing on getting the right equipment for the job and not about investing in the stock market, this quiz and corresponding worksheet will help you gauge your knowledge of private investment and real interest rates. Topics you'll need to know to pass the quiz include understanding how the demand for loanable funds is primarily determined as well as knowing the most important determinant of saving.

Quiz & Worksheet Goals

Use this printable worksheet and quiz to review:

  • What determines the demand for loanable funds
  • Most important determinant of saving
  • Effects of interest rates
  • When investment demand will increase
  • Increase in national savings effects
  • Results of tax incentives for savings
  • Results of tax incentives for investment

Skills Practiced

This worksheet and quiz will let you practice the following skills:

  • Interpreting information - verify you can read information regarding the relationship between savings and borrowing and interpret it correctly
  • Knowledge application - use your knowledge to answer questions about the effects of interest rates
  • Reading comprehension - ensure that you draw the most important information from the related private investment lesson

Additional Learning

To learn more about how interest rates affect getting needed equipment, review the corresponding lesson on Private Investment and Real Interest Rates. This lesson will help you:

  • Understand how banks facilitate savings and investing
  • Describe what the gross private domestic investment involves
  • Identify the two requisites for the demand for loanable funds and their characteristics
  • Explain how expectations play a role in the market
  • Appreciate what determines levels of savings
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