If the Quantity of Loanable Funds Supplied Is Greater Than

question 63

Multiple Choice

If the quantity of loanable funds supplied is greater than the quantity demanded, what best describes the difference?

• A) There is a surplus of loanable funds, and the interest rate will fall.
• B) There is a shortage of loanable funds, and the interest rate will rise.
• C) There is a surplus of loanable funds that is used to buy foreign assets.
• D) There is a shortage of loanable funds that is used to buy foreign assets.

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Definitions:

Increase Assets

An augmentation in the total value or amount of economic resources owned or controlled by an entity.

Increase Liabilities

An action that results in a rise in the obligations or debts of a company, affecting the company's financial position.

Increase Owner's Equity

An action or event that enhances the net worth of a business as reflected in capital or owner's investment.

Decrease Assets

A reduction in the total value or amount of economic resources owned or controlled by an entity.