An Increase in the Real Interest Rate ________ the Quantity

question 129

Multiple Choice

An increase in the real interest rate ________ the quantity of loanable funds supplied and ________ the quantity of loanable funds demanded.

• A) increases; increases
• B) increases; decreases
• C) decreases; increases
• D) decreases; decreases

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Definitions:

Return On Equity

A financial ratio that measures the profitability of a company in generating profit from its shareholders' equity.

Dividends

Disbursements from a company to its shareholders, typically originating from the firm's earnings.

Market Price

The current price at which an asset or service can be bought or sold in the open market.

Gross Margin

The difference between revenue and cost of goods sold, divided by revenue, expressed as a percentage, indicating the financial health of a company's core activities.