When the Real Interest Rate Increases

question 83

Multiple Choice

When the real interest rate increases

• A) the supply of loanable funds curve shifts rightward.
• B) the supply of loanable funds curve shifts leftward.
• C) there is a movement upward along the supply of loanable funds curve.
• D) there is a movement downward along the supply of loanable funds curve.

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Definitions:

Without Recourse

A phrase indicating that the holder of a financial instrument cannot demand payment from the originator if the instrument fails to pay.

Indorser

A person or entity that signs the back of a negotiable instrument, thereby transferring ownership or guaranteeing payment to another party.

Negotiable

A term that describes the transferable nature of certain documents or instruments, such as checks, which can be legally and freely passed from one party to another.

Holder in Due Course

A party that has acquired a negotiable instrument in good faith, for value, and without notice of any defect, and thus is protected from certain defenses and claims.