If Economic Expansion Is Expected to Decrease, the Demand for Loanable

question 17

Multiple Choice

If economic expansion is expected to decrease, the demand for loanable funds should ____ and interest rates should ____. ​

• A)increase; increase
• B)increase; decrease
• C)decrease; decrease
• D)decrease; increase

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Definitions:

Rights Offering

A method companies use to raise capital, which gives existing shareholders the right to purchase additional shares at a discounted price before the public.

Ownership Position

Ownership position refers to the holding of equity in a company or property, granting the holder rights to profits, voting, and potentially influencing management decisions.

Subscription Price

The cost at which investors can buy shares during an offering before they are available to the general public.

Common Share

A type of security that represents ownership in a corporation, entitling the holder to vote at shareholders' meetings and to receive dividends.