Suppose the Real Interest Rate Increases from 4 Per Cent

question 55

Multiple Choice

Suppose the real interest rate increases from 4 per cent to 6 per cent. As a result,

• A) firms increase their demand for loanable funds.
• B) governments decrease their demand for loanable funds.
• C) firms decrease the quantity demanded of loanable funds.
• D) governments decrease the quantity supplied of loanable funds.
• E) governments increase the supply of loanable funds.

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Definitions:

Environmental Pollution

The contamination of the natural environment causing adverse effects on living beings and the ecosystem.

Incorporation Practices

Incorporation practices involve legal and procedural steps required to form and register a company as a separate legal entity, according to specific jurisdictional regulations.

Business Ownership

refers to the possession and control over a business enterprise, including the rights to make decisions and reap the benefits or losses.

Global Managers

Refers to managerial professionals who operate and make decisions within an international context, often dealing with cross-cultural and global business challenges.