In General, When Interest Rates Fall, a Savings Institution's Cost

question 21

True/False

In general, when interest rates fall, a savings institution's cost of obtaining funds declines more than the decline in the interest earned on its loans and investments.

---

Definitions:

Market Equilibrium

A condition or state in which market supply equals market demand, meaning that prices are stable and the quantity of goods supplied exactly matches the quantity demanded.

Producing

The action of making or manufacturing from components or raw materials.

Producer Surplus

The discrepancy between the price at which producers are ready to offer a good and the actual amount they get for it.