Which of the Following Statements Is (Are)correct? the Equilibrium Interest

question 55

Multiple Choice

Which of the following statements is (are) correct? The equilibrium interest rate is the rate that

• A)equates the supply of loanable funds with the demand for loanable funds
• B)equates new saving with investment plus the bond-financed government surplus
• C)equates private savings with investment
• D)All of the above
• E)None of the above

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Definitions:

Net Investment

The total amount spent on purchasing new assets and maintaining existing ones, minus any depreciation.

Initial Direct Costs

Expenses directly associated with acquiring or initiating a lease, which can include commissions, legal fees, and other incremental costs.

Unearned Interest Revenue-Leases

Revenue recognized from leasing transactions which has been collected but not yet earned, typically because the service period has not been completed.

Sales-type Lease

A lease agreement in which the lessor effectively transfers ownership and all risks and rewards of the asset to the lessee, resulting in immediate profit recognition.