Which of These Would Cause Both the Equilibrium Interest Rate

question 67

Multiple Choice

Which of these would cause both the equilibrium interest rate and the equilibrium quantity to fall in the market for loanable funds?

• A) an increase in the average income of the population
• B) expectations of greater job security
• C) an adjustment to building codes that make it more difficult to get government permits to build new buildings
• D) expectations of greater business profits

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Definitions:

Total Income

The sum of all earnings obtained from any source, including wages, rental income, profits, dividends, and interest.

Total Taxes

The cumulative amount of taxes paid by individuals or companies to the government, including federal, state, and local taxes.

Marginal Tax Rates

The rate at which the last dollar of income is taxed, indicating the percentage of tax applied to your income for each tax bracket in which you qualify.

Average Tax Rates

The ratio of the total amount of taxes paid to the total income, showing the fraction of income paid in taxes.