If Firms Became More Optimistic About the Future of the Economy,which

question 109

Multiple Choice

If firms became more optimistic about the future of the economy,which of the following occurs?

• A)Saving decreases,and the supply of loanable funds curve shifts leftward.
• B)Investment demand decreases,and the demand for loanable funds curve shifts leftward.
• C)Investment demand increases,and the demand for loanable funds curve shifts rightward.
• D)The quantity of investment demanded decreases,and there is a movement up along the demand for loanable funds curve.
• E)The quantity of investment demanded increases,and there is a movement down along the demand for loanable funds curve.

---

Definitions:

Discount

The reduction from the full amount or value of something, especially the price of a financial instrument or merchandise.

Coupon Rate

The annual interest rate paid by a bond as a percentage of the face value, indicating the income investors can expect to receive.

Interest Rates

The percentage of a sum of money charged for its use, often expressed as an annual percentage.

Premium

The amount paid for an insurance policy or an extra charge for an enhanced or optional service over and above the basic.