If the Interest Rate on Borrowing Falls

question 35

Multiple Choice

If the interest rate on borrowing falls,

• A)the demand curve for loans will shift out.
• B)the discounted value now of money to be received in the future will fall.
• C)some previously unprofitable prospective investments will become profitable.
• D)All of the above are correct.

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Definitions:

Foreign Exchange Market

A marketplace where currencies are traded internationally, allowing businesses and countries to convert currency for international trade and finance.

Aggregate Demand

The total demand for all goods and services in an economy at any given overall price level and in a given time period.

Price Level

A measure of the average prices of goods and services in an economy at a given time, often used as an indicator of inflation.

Short-Run Aggregate Supply Curve

A graphical representation that shows the relationship between the total supply of goods and services produced by a country at various price levels in the short-run.