The Demand for Capital Is Q^D = 80 - 15r

question 45

Multiple Choice

The demand for capital is Q^D = 80 - 15r and the supply of capital is Q^S = 20r - 60, where r is the interest rate and Q is the quantity of capital in millions of dollars. Businesses become more optimistic about the business environment and borrow $70 million more capital at each interest rate level. The equilibrium quantity of capital as a result of this newfound optimism is ____.

• A) 40
• B) 20
• C) 50
• D) 60

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Definitions:

Intended Third-Party Beneficiaries

Individuals or groups not directly involved in a contract who are nevertheless intended by the contracting parties to benefit from the contract's performance.

Creditor Beneficiaries

Individuals or entities that benefit from a contract made between two other parties, particularly in their capacity to receive a debt payment.

Donee Beneficiaries

Third-party beneficiaries for whom a contract is made to benefit as a gift, giving them the right to enforce the contract against the promisor.

Assigned Donees

Individuals or entities designated to receive specific gifts or donations.