Suppose That a Business Discovers an Opportunity That Requires Funds

question 49

Multiple Choice

Suppose that a business discovers an opportunity that requires funds to exploit. What effect would this have in the market for loanable funds?

• A)It will increase interest rates and the quantity of funds lent will rise.
• B)It will decrease interest rates and the quantity of funds lent will rise.
• C)It will increase interest rates and the quantity of funds lent will fall.
• D)It will decrease interest rates and the quantity of funds lent will fall.

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Definitions:

Extinction

The process by which a species, genus, or family of organisms ceases to exist through death or inability to reproduce in its natural environment.

Values

Values are the principles or standards of behavior that are considered important in life or in a particular decision-making process.

Transaction

An economic event that involves the transfer of goods, services, or funds between two or more parties.

Incentives

Motivations or stimuli that influence the behavior of individuals or organizations, often aimed at achieving certain outcomes or goals.