If There Is an Increase in the Demand for U

question 4

Multiple Choice

If there is an increase in the demand for U.S. automobiles, the

• A) demand for dollars will fall.
• B) demand for dollars will rise.
• C) supply of dollars will fall.
• D) supply of dollars will rise.

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Definitions:

Loanable Funds

The funds available within an economy for borrowing, which consist of household savings, business savings, and any government surplus.

Consumption

The process by which goods and services are used up or utilized, reflecting household spending on such goods and services.

Investment Tax Credit

A tax credit offered by the government to encourage businesses to invest in certain assets by allowing them to deduct a portion of the investment cost from their taxes.

Loanable Funds

The market in which savers supply funds to borrowers who want to borrow, influencing interest rates and overall economic activity.