If There Is a Surplus of Loanable Funds, the Quantity

question 24

Multiple Choice

If there is a surplus of loanable funds, the quantity demanded is

• A)greater than the quantity supplied and the interest rate will rise.
• B)greater than the quantity supplied and the interest rate will fall.
• C)less than the quantity supplied and the interest rate will rise.
• D)less than the quantity supplied and the interest rate will fall.

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Definitions:

Liability Account

An accounting record that captures the amounts a company owes to lenders or suppliers, not yet paid but recognized as obligations.

Legal Binding

A situation or agreement that is enforced by law, holding parties to their commitments or obligations.

Dividends

Money paid out by a corporation to its shareholders, mainly as a division of profits.

Property

Assets owned by an individual or business, encompassing both tangible items, like real estate and equipment, and intangible items, like intellectual property.