In 2008 the Fall in the Value of the Stock

question 106

Multiple Choice

In 2008 the fall in the value of the stock market decreased people's wealth.As a result of this change alone, the supply of loanable funds

• A) increased.
• B) did not change and there was no movement along the supply of loanable funds curve.
• C) decreased.
• D) did not change and there was an upward movement along the supply of loanable funds curve.
• E) did not change and there was a downward movement along the supply of loanable funds curve.

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Definitions:

Spot Rate

The current price at which a particular currency can be bought or sold for immediate delivery.

Adjustment

An entry made in the accounts to correct a mistake or account for a transaction not reflected in the current financial statements.

Bonds

Bonds are debt securities issued by entities such as corporations or governments to raise funds, promising to repay the borrowed money at a specified interest rate over a set period.

Interest

The cost of borrowing money or the income earned from lending money, usually calculated as a percentage of the principal amount.