Assume That Foreign Investors Who Have Invested in U

question 32

Multiple Choice

Assume that foreign investors who have invested in U.S. securities decide to decrease their holdings of U.S. securities and to instead increase their holdings of securities in their own countries. This should cause the supply of loanable funds in the United States to______ and should place ____ pressure on U.S. interest rates.

• A) decrease; upward
• B) decrease; downward
• C) increase; downward
• D) increase; upward

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Definitions:

Marginal Revenue

The additional income gained from selling one more unit of a good or service.

Prefabricated Garages

Garages that are manufactured in sections off-site and then assembled on-site, providing a quick and often cost-effective building solution.

Sales Schedule

A detailed plan that outlines the expected timing and quantity of sales of a product or service.

Price Makers

Firms that possess the power to set the price of a good or service because of a lack of competition or the unique nature of the product.