Refer to the Following Graph to Answer the Following Questions

question 32

Multiple Choice

Refer to the following graph to answer the following questions:
-Assuming the figure represents the market for loanable funds,and that point C represents $40 million and point D represents $70 million,then it would be true that

• A) at interest rate A,the market is in equilibrium.
• B) at interest rate A,there is a surplus of $30 million of loanable funds.
• C) at interest rate A,there is a shortage of $30 million of loanable funds.
• D) because there is a disequilibrium at interest rate A,interest rates must fall.
• E) the interest rate represented by A must be greater than that represented by B.

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Definitions:

Excessive Profits

Earnings that significantly exceed the norm for a industry or market, often viewed critically in terms of business ethics or competition fairness.

Equivalent Risk

A concept in finance and investments referring to two or more investment options that have the same level of risk.

Hypercompetition

A condition in the market characterized by rapid and intense competitive moves, where advantages are quickly eroded.

Intermittent Profits

Earnings that are not consistent or regular, often fluctuating due to various external or internal factors.