Increases in Interest Rates

question 85

Multiple Choice

Increases in interest rates

• A)reduce borrowers' net worth.
• B)reduce lenders' net worth.
• C)increase the present value of borrowers' assets.
• D)raise the cost to businesses of internal funding.

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Definitions:

Supply of Loanable Funds

The total amount of funds available for borrowing in the economy, influenced by savings, government policies, and financial institutions.

Shift of the Supply Curve

A movement of the entire supply curve to the left or right, caused by a change in a factor other than the price of the good or service itself, indicating a change in the quantity supplied at every price.

Quantity of Loanable Funds

The total amount of funds available for borrowing in the financial markets, based on savings and the supply of credit.

Ball Court

A specific area designated for playing ball games, often found in ancient Mesoamerican sites, used for religious and social activities.