As the Prevailing Interest Rate Increases,all of the Following Occur

question 93

Multiple Choice

As the prevailing interest rate increases,all of the following occur except

• A)Quantity demanded of loanable funds decreases.
• B)Quantity supplied of loanable funds increases.
• C)Cost of borrowing rises.
• D)Supply curve for loanable funds shifts to the right.

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Definitions:

Total Debt Ratio

A financial metric that compares the total amount of a company's debt to its total assets, indicating the extent to which a company's operations are financed by debt.

Net Working Capital Turnover

A measure of how effectively a company is using its net working capital to generate sales.

Total Fixed Assets

The cumulative value of all long-term tangible assets that a company owns and uses in its operations, and are not intended for resale within the business year.

Long-term Liabilities

Debts or obligations that are due in more than one year's time, reflecting a company's financing strategies beyond the short term.