Which of the Following Would Make Both the Equilibrium Interest

question 133

Multiple Choice

Which of the following would make both the equilibrium interest rate and the equilibrium quantity of loanable funds increase?

• A)The demand for loanable funds shifts right.
• B)The demand for loanable funds shifts left.
• C)The supply of loanable funds shifts right.
• D)The supply of loanable funds shifts left.

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Definitions:

Capital-labor Ratio

The ratio of the total capital employed by a firm to the number of its labor force, indicating the amount of capital used per worker.

Production Function

Function showing the highest output that a firm can produce for every specified combination of inputs.

Annual Output

The total production or quantity of goods and services produced by a company or economy in one year.

Economies of Scale

The cost advantage achieved by an increase in production, leading to a decrease in the average cost per unit through efficient allocation of resources and spreading of fixed costs.