If the Price for Loanable Funds Is Less Than the Return

question 79

Multiple Choice

If the price for loanable funds is less than the return on capital, then firms will

• A)borrow in the loanable funds market and invest in capital goods, and as this happens, the quantity of capital decreases and its return rises.
• B)borrow in the loanable funds market and invest in capital goods, and as this happens, the quantity of capital increases and its return falls.
• C)not borrow in the loanable funds market, and over time the capital stock will decrease and the return on capital will fall.
• D)not borrow in the loanable funds market, and over time the capital stock will decrease and the return on capital will rise.

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Definitions:

Psychological Space

A mental or emotional area that individuals create for themselves, characterized by personal boundaries, privacy, and a sense of personal identity.

Ambience

The character and atmosphere of a place, influenced by its visual, auditory, and olfactory elements, affecting the experience of those within it.

Bright Colors

Vivid shades that are striking and noticeable due to their intensity and are often associated with attention, safety, and excitement.

Intimate Zone

The physical space immediately surrounding an individual, into which entry implies familiarity and personal interaction.