If There Is an Excess Demand for Loanable Funds at a Given

question 5

Multiple Choice

If there is an excess demand for loanable funds at a given interest rate:

• A) bond prices will increase.
• B) bond prices will decrease.
• C) the interest rate will rise.
• D) bond prices may rise or fall, depending on the cause for excess funds.

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Definitions:

Action Potentials

Rapid and temporary electrical impulses that travel across the membrane of nerve cells, facilitating neuronal communication.

Synapse

The junction between two neurons or between a neuron and muscle fiber, where electrical or chemical signals are transmitted.

All-or-none Law

A principle stating that the strength of a response of a nerve or muscle fiber is not dependent on the strength of the stimulus. If a stimulus is above a certain threshold, a nerve or muscle fiber will fire.

Physiological Explanation

Physiological explanation involves interpreting behaviors, functions, or responses in terms of the biological processes and structures underlying them.