If the Demand for Loanable Funds Shifts Right, Then the Real

question 12

Multiple Choice

If the demand for loanable funds shifts right, then the real interest rate

• A)and the equilibrium quantity of loanable funds both fall.
• B)falls and the equilibrium quantity of loanable funds rises.
• C)and the equilibrium quantity of loanable funds both rise.
• D)rises and the equilibrium quantify of loanable funds falls.

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Definitions:

Investor

An individual or entity that allocates capital with the expectation of receiving financial returns, usually through stocks, bonds, or real estate.

Investee

The entity in which an investment is made, often subject to the influence or control of the investor through ownership of equity shares or other mechanisms.

Bargain Purchase

An acquisition where the purchase price is significantly less than the fair value of the net identifiable assets of the acquired company.

Deferred Tax Liability

A tax obligation that arises from temporary differences between the accounting and tax treatment of assets and liabilities which is expected to be settled in the future.