Which of the Following Would Be Most Likely to Lower

question 20

Multiple Choice

Which of the following would be most likely to lower the interest rate that a bank offers a borrower?

• A)The number of borrowers seeking funds is high.
• B)The expected inflation rate is expected to be high.
• C)The borrower is judged to have a low degree of risk.
• D)The investment will be for a long period of time.
• E)The number of savers depositing funds at the bank is low.

Understand the relationship between the marginal propensity to consume (MPC) and the spending multiplier.

Comprehend the role of the price level in defining the aggregate demand and expenditure in an economy.

Understand the relationship and differences between the aggregate demand curve, the aggregate expenditure line, and shifts due to various economic factors.

Grasp the effects of changes in the marginal propensities to save and consume on the consumption function and multiplier.

---

Definitions:

Inventory Valuation

The method of calculating the cost of goods available for sale and determining the end inventory balance.

Net Realizable Value

The estimated selling price of goods, minus the costs of their completion and costs necessary to make the sale.

Market Value

Market value is the current price at which an asset or service can be bought or sold in a marketplace.

Ending Inventory

The total value of all merchandise or goods held by a company at the end of an accounting period, which has not been sold.