-In the Above Figure, the Initial Supply of Loanable Funds

question 196

Multiple Choice

-In the above figure, the initial supply of loanable funds curve is SLF₀ and the demand for loanable funds investment curve is DLF₀. An increase in the real interest rate to 7 percent could be caused by

• A) a decrease in the expected profit.
• B) an increase in investment demand.
• C) an increase in people's disposable incomes.
• D) an expansion that increased both saving and investment by the same amount.

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Definitions:

Units Produced

The total quantity of units manufactured during a specific period in a manufacturing or production process.

Depreciation Expense

The allocated amount of an asset's cost over its useful life, representing the wear and tear or obsolescence of the asset.

Double-Declining-Balance Method

An accelerated depreciation method in which an asset's book value is reduced by twice the rate of its straight-line depreciation.

Depreciation Record

Documentation that tracks the reduction in value of an asset over time due to wear and tear.