If Saving Exceeds Investment Demand, and Consumption Is Not a Function

question 124

Multiple Choice

If saving exceeds investment demand, and consumption is not a function of the interest rate:

• A) the demand for loans exceeds the supply of loans.
• B) the interest rate will fall.
• C) the interest rate will rise.
• D) saving will fall.

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Definitions:

Leasing

A process by which one party, the lessor, grants another party, the lessee, the right to use an asset for a specified period of time in exchange for periodic payments.

Assets

Economic resources owned by an individual or business, capable of being converted into cash or used to generate revenue.

Less Restrictive Financing

Financing options that offer more flexible terms and conditions, often resulting in higher levels of debt that can be used by a company for expansion or other purposes.

Leasing

An agreement where one party pays another for the use of an asset over a set period, often used for equipment, vehicles, or property, without provided ownership.