The Table Below Shows Data for the United States Between 2006 and 2007, the Real Interest Rate and Caused

question 154

Multiple Choice

The table below shows data for the United States.
$$\begin{array} { | l | l | l | } \hline & \begin{array} { l } \text { Nominal } \\\text { Interest } \\\text { Rate }\end{array} & \begin{array} { l } \text { Inflation } \\\text { Rate }\end{array} \\\hline 2006 & 5.25 & 4 \\\hline 2007 & 5 & 2 \\\hline 2008 & 4.5 & 4.3 \\\hline\end{array}$$
Between 2006 and 2007, the real interest rate and caused a the demand for loanable funds curve.

• A) decreased; downward along
• B) decreased; leftward.
• C) increased; movement upward along
• D) increased; rightward shift.

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Definitions:

Gross Purchases

The total amount of all purchases made by a business before deducting any discounts, returns, or allowances.

Credit Terms

Credit terms are the payments conditions set by sellers for goods and services, including the period provided to the buyer to settle the owed amount.

Cash Conversion Cycle

A metric that shows the time span between a company's outlay of cash for raw materials and receiving payment from its customers, effectively measuring the time each net input dollar is tied up in the production and sales process.

Long-term Capital

Funds or assets held by a company for more than one year, used for financing long-term projects or investments.