An Increase in the Demand for Borrowing Will Cause the Equilibrium

question 177

Multiple Choice

An increase in the demand for borrowing will cause the equilibrium quantity of borrowing to:

• A) increase.
• B) decrease.
• C) remain unchanged.
• D) first increase and then decrease.

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Definitions:

Marginal Product

The additional output generated by increasing one unit of a specific input, keeping other inputs constant.

Labor

The human effort, both physical and mental, used in the production of goods and services.

Average Product

The quantity of goods produced per unit of input, determined by dividing the overall output by the amount of input used.