If,at a Given Interest Rate,the Quantity of Savings Supplied Is

question 144

Multiple Choice

If,at a given interest rate,the quantity of savings supplied is greater than the quantity of investment demanded,what can we conclude?

• A)There is a shortage of savings and real interest rates will rise.
• B)There is a surplus of savings and real interest rates will rise.
• C)There is a shortage of savings and real interest rates will fall.
• D)There is a surplus of savings and real interest rates will fall.

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Definitions:

Risk

The potential for losing something of value, often measured by the variability of returns associated with an investment.

Cash Flow Estimating

The process of projecting the future cash inflows and outflows of a project or company to determine its financial health.

Capital Budgeting

The process businesses use to evaluate potential major projects or investments.

Positive/Negative Analysis

An evaluative process that assesses the positive and negative outcomes or impacts of a decision or situation.