An Increase in the Real Interest Rate

question 3

Multiple Choice

An increase in the real interest rate

• A) reduces savings.
• B) shifts the current labour supply curve to the right.
• C) shifts the current labour supply curve to the left.
• D) reduces the real wage.
• E) reduces the labour supply.

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Definitions:

Preemptive Right

A shareholder’s option to purchase new issuances of shares in proportion to the shareholder’s current ownership of the corporation.

Model Business Corporation Act

A set of model laws prepared to assist states in drafting legislation to regulate the formation and operation of corporations.

Articles of Incorporation

The primary document required to register a corporation with a state, detailing the fundamental aspects of the company, such as its name, purpose, and structure.

Share Split

A corporate action in which a company divides its existing shares into multiple shares to boost the liquidity of the shares, although the overall value of the shares remains the same.