A Decrease in Expected Profit

question 2

Multiple Choice

A decrease in expected profit

• A)increases the demand for loanable funds.
• B)lowers the equilibrium real interest rate.
• C)increases the supply of loanable funds.
• D)raises the equilibrium real interest rate.
• E)decreases the supply of loanable funds.

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Definitions:

Marginal Benefit

The extra advantage gained by using an additional unit of a product or service.

Producing

The act or process of creating goods or services by combining labor, materials, and technology.

Fifth Sweatshirt

Additional unit or item, indicative of a point in consumption where assessing marginal utility or other economic factors becomes relevant.

Ability-to-pay

A principle in taxation that states taxes should be levied on individuals or entities based on their ability to pay, which is often measured by income or wealth.