Suppose Business Decision Makers Become More Optimistic About Future Economic

question 193

Multiple Choice

Suppose business decision makers become more optimistic about future economic conditions and desire additional funds to expand their plant capacity. What is the likely effect on the loanable funds market?

• A) The demand for loanable funds will increase, and the interest rate will rise.
• B) The demand for loanable funds will decrease, and the interest rate will fall.
• C) The supply for loanable funds will increase, and the interest rate will fall.
• D) The supply for loanable funds will decrease, and the interest rate will rise.

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Definitions:

Reciprocity

A social interaction principle where an action is repaid with a corresponding one, beneficial in the formation and maintenance of social bonds.

Ophiocordyceps

A genus of fungi known for parasitizing insects and other arthropods, causing altered behaviors that benefit the fungus's dissemination.

Fungal Spores

Reproductive units produced by fungi, capable of developing into new fungal organisms under suitable environmental conditions, important for fungal distribution and diversity.

Selfishness

Behavior in which an individual puts its own interests above those of others, often at the expense of group welfare.