Which of the Following Events Would Lead to an Increase

question 113

Multiple Choice

Which of the following events would lead to an increase in the supply of loanable funds and a decrease in the interest rate?

• A)decreases in foreign purchases of domestic financial assets, ceteris paribus
• B)decreases in U.S. interest rates relative to those abroad
• C)increases in foreign purchases of U.S. financial assets, ceteris paribus
• D)increases in U.S. purchases of foreign financial assets, ceteris paribus

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Definitions:

Expense

Costs incurred by a business in the process of earning revenues, typically classified as operating or non-operating expenses.

Common Stock

A type of equity security representing ownership in a corporation, entitling the owner to vote at shareholder meetings and receive dividends.

Legal Liability

The legal responsibility to pay debts or damages, which can arise from contracts, negligence, or other legal means.

Declared

Pertains to dividends or other distributions that have been officially announced by a company's board of directors.