When Consumers and Businesses Have Greater Confidence That They Will

question 29

Multiple Choice

When consumers and businesses have greater confidence that they will be able to repay in the future, _______.

• A) the quantity demanded of financial capital at any given interest rate will remain unchanged.
• B) the quantity demanded of financial capital at any given interest rate will shift to the left.
• C) the quantity demanded of financial capital at any given interest rate will shift to the right.
• D) the quantity demanded of financial capital at any given interest rate will achieve equilibrium.

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Definitions:

LIFO Inventory

An inventory valuation method that assumes the last items placed in inventory are the first sold.

Market Value

The ongoing rate for purchasing or selling a good or service in the marketplace.

Inventory Valuation Method

A system used by businesses to assess the cost of their inventory, affecting financial statements and taxation.

Gross Profit

The financial metric calculated by subtracting the cost of goods sold from the net sales, representing the profit from sales before deducting operating expenses.