Which of the Following Events Would Most Likely Cause the Nominal

question 37

Multiple Choice

Which of the following events would most likely cause the nominal interest rate to fall?

• A)The supply of loanable funds decreases.
• B)Both the supply of and the demand for loanable funds increase.
• C)Both the supply of and the demand for loanable funds decrease.
• D)The supply of loanable funds increases and the demand for loanable funds decreases.
• E)The supply of loanable funds decreases and the demand for loanable funds increases.

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Definitions:

Rate of Return

The increase or decrease in the value of an investment during a set timeframe, shown as a percentage of the investment's starting price.

Portfolio

A collection of investments held by an individual or institution, including stocks, bonds, real estate, and other assets.

Successive Years

Consecutive years following one after the other without interruption.

Compound-Interest GIC

A Compound-Interest Guaranteed Investment Certificate (GIC) is a financial product that pays interest on your initial investment, with the interest being compounded at specified intervals, leading to increased returns over time.