As the Interest Rate Falls

question 95

Multiple Choice

As the interest rate falls,

• A)the quantity of money demanded falls,which would reduce a shortage.
• B)the quantity of money demanded falls,which would reduce a surplus.
• C)the quantity of money demanded rises,which would reduce a shortage.
• D)the quantity of money demanded rises,which would reduce a surplus.

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Definitions:

Canada Revenue Agency

The federal agency responsible for administering tax laws and various social and economic benefit and incentive programs delivered through the tax system for the Government of Canada.

Simple Interest

A method of calculating interest where the charge is based on the original principal amount and does not compound.

Principal Amount

The original sum of money lent in a loan or invested, excluding any interest or profits.

Accrued Interest

Interest on a loan or bond that has accumulated but not yet been paid.