Which of the Following Would Most Likely Happen in the Market

question 123

Multiple Choice

Which of the following would most likely happen in the market for loanable funds if the government were to decrease the tax rate on interest income?

• A)The supply of and demand for loanable funds would shift to the right.
• B)The supply of and demand for loanable funds would shift to the left.
• C)The supply of loanable funds would shift to the right and the demand for loanable funds would shift to the left.
• D)The supply of loanable funds would shift to the right and the demand for loanable funds will remain unchanged.

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Definitions:

Operating Activities

Activities that constitute the primary or main activities of a business, including sales, services, and day-to-day operations.

Merchandise Inventory

The total value of a retailer's or wholesaler's goods on hand at the end of an accounting period, available for sale to customers.

Accounts Payable

Money owed by a company to its suppliers or creditors for goods and services received but not yet paid for.

Indirect Method

A method used in cash flow statements to convert net income into net cash flow from operating activities by adjusting for non-cash transactions and changes in working capital.