If the Real Interest Rate Rises from 3 Percent to 5

question 49

Multiple Choice

If the real interest rate rises from 3 percent to 5 percent,

• A)the nominal interest rate falls.
• B)the demand for loanable funds curve shifts rightward.
• C)there is a movement up along the demand for loanable funds curve.
• D)the supply of loanable funds curve shifts rightward.
• E)there is a movement down along the supply of loanable funds curve.

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Definitions:

Percentage Depletion

A tax deduction method allowing businesses to account for the decrease of reserves in natural resources through a percentage of the revenue generated from those resources.

Cost Depletion

An accounting method used for allocating the cost of natural resources (like timber, oil, or minerals) over the period that they are extracted and sold.

Income Tax Allocation

The process of assigning income taxes to different departments, periods, or product lines in financial accounting.