-In the Above Figure, the Demand for Loanable Funds Curve

question 17

Multiple Choice

-In the above figure, the demand for loanable funds curve is drawn for the average expected profit. If the real interest rate is constant at 6 percent and the expected profit falls, the amount of loanable funds demanded will be

• A) less than $450 billion.
• B) $450 billion.
• C) between $450 billion and $600 billion.
• D) greater than $600 billion.

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Definitions:

Variable Production Costs

Costs that vary directly with the volume of production, including direct labor and materials.

Traceable Fixed Expense

Fixed costs that can be directly linked to a specific segment of the business, and would disappear if the segment did.

Fixed Manufacturing Overhead

The portion of manufacturing overhead costs that remains constant regardless of the level of production.

Variable Costing

An accounting method that considers only variable production costs (costs that change with the level of output) in the calculation of product costs.