Other Things the Same,a Higher Real Interest Rate Raises the Quantity

question 20

Multiple Choice

Other things the same,a higher real interest rate raises the quantity of

• A)domestic investment.
• B)net capital outflow.
• C)loanable funds demanded.
• D)loanable funds supplied.

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Definitions:

Economies of Scale

The savings businesses gain from operating at a larger scale, where the expense for each unit produced diminishes as the scale enlarges.

Short Run

A period in which at least one input in the production process is fixed, limiting the ability of a firm to adjust to changes in market demand.

Long Run

An economic term referring to a period during which all factors of production and costs are variable, allowing for full adjustment to changes.

Fixed Cost

Costs that do not change with the level of output or sales, such as rent or salaries.