As a Result of an Increase in the Supply of Savings

question 25

Multiple Choice

As a result of an increase in the supply of savings:

• A) both the interest rate and the demand for borrowing decrease.
• B) the interest rate increases,but the demand for borrowing decreases.
• C) both the interest rate and the demand for borrowing increase.
• D) the interest rate decreases,but the amount of borrowing increases.

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Definitions:

Capital Balances

The amount of money that owners have invested in a company, minus any withdrawals, often shown in the equity section of the balance sheet.

Net Income

A company's profit remaining after all expenses, taxes, and losses have been deducted.

Closing the Revenue

The process of finalizing all revenue transactions within a given period, marking the end of a business's revenue cycle for that timeframe.

Partnership Capital

The total capital contributions made by all partners in a partnership, which is used in the business operations.