An Increase in the Expected Rate of Inflation Will Shift

question 112

Multiple Choice

An increase in the expected rate of inflation will shift the demand for loanable funds curve __________, while shifting the supply of loanable funds curve __________.

• A)rightward; rightward
• B)rightward; leftward
• C)leftward; rightward
• D)leftward; leftward

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Definitions:

Fixed Costs

Costs that do not vary with the level of production or sales, such as rent, salaries, and insurance premiums.

Profit-Maximizing

A strategy firms adopt aiming to produce the quantity of goods or services that leads to the highest possible profit.

Average Variable Cost

The variable cost per unit of output, calculated by dividing total variable costs by the quantity of output produced.

Output

The total amount of goods or services produced by a company, industry, or economy within a particular period.