Refer to the Figure Below to Answer the Following Questions

question 131

Multiple Choice

Refer to the figure below to answer the following questions.

Figure 23.2.4
-In Figure 23.2.4, the economy is at point A on the supply of loanable funds curve SLF₀. What happens if disposable income decreases?

• A)Nothing; the economy would remain at point A.
• B)There is a movement to a point such as B on the supply of loanable funds curve SLF₀.
• C)The supply of loanable funds curve shifts rightward to a curve such as SLF₂.
• D)The supply of loanable funds curve shifts leftward to a curve such as SLF₁.
• E)The supply of loanable funds curve becomes downward sloping.

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Definitions:

Retained Earnings

The total earnings of a company so far, minus any dividends or distributions given out to shareholders.

Closing Entries

Journal entries made at the end of an accounting period to transfer the balances of temporary accounts to permanent ones, preparing the books for the next period.

Retained Earnings

The portion of net income left over after dividends are paid out to shareholders, reinvested into the company's operations.

Closing Entries

Journal entries made at the end of an accounting period to transfer the balances of temporary accounts to permanent accounts, thereby preparing the books for the next period.