If There Is a Surplus of Loanable Funds, the Quantity

question 24

Multiple Choice

If there is a surplus of loanable funds, the quantity demanded is

• A)greater than the quantity supplied and the interest rate will rise.
• B)greater than the quantity supplied and the interest rate will fall.
• C)less than the quantity supplied and the interest rate will rise.
• D)less than the quantity supplied and the interest rate will fall.

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Definitions:

Government

The organization or system through which a community or society is governed, often responsible for creating and enforcing laws.

Market Failure

A scenario where goods and services distributed by an unrestricted market fail to achieve efficiency, frequently making a case for governmental involvement.

Poor Information

A situation where individuals or entities make decisions based on incomplete, inaccurate, or misleading information.

Repeat-purchase Item

A product or service that is bought by consumers on a regular basis due to its continuing need or satisfaction.