Consider the Market for Loanable Funds in the Long Run

question 20

Multiple Choice

Consider the market for loanable funds in the long run. The national saving curve is upward sloping because an increase in the real interest rate

• A)decreases the supply of private saving.
• B)leads households to reduce their current consumption.
• C)leads to an increase in investment demand.
• D)decreases the supply of public saving.
• E)leads households to increase their current consumption.

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Definitions:

Inventory Turnover

A measure of how quickly a company sells and replaces its inventory in a given period.

Tax Rate

The percentage at which an individual or corporation is taxed, which can vary based on income level, type of income, or jurisdiction.

Total Debt Ratio

This ratio measures the proportion of a company's total debt to its total assets, indicating the extent of leverage and financial risk.

Total Assets

The sum of all current and non-current assets that a company owns, used in evaluating the company's financial strength.