The Derived Demand Curve for Loans Slopes Downward Because as Interest

question 70

Multiple Choice

The derived demand curve for loans slopes downward because as interest rates

• A)fall, future income becomes less valuable.
• B)fall, investors develop pessimistic expectations.
• C)fall, future income becomes more valuable.
• D)rise, investors become pessimistic.

---

Definitions:

Cash Account

An account reflecting the amount of cash a company or individual has available.

Work in Process Inventory

Items that are partially completed during manufacturing, which are not yet ready for sale.

Direct Labor Costs

Costs that can be directly attributed to the production of goods or services, such as wages paid to workers manufacturing a product.

Net Operating Income

This is the income derived from normal business operations after deducting operating expenses but before interest and taxes.