If the Equilibrium Interest Rate in the Market Is Estimated

question 45

Multiple Choice

If the equilibrium interest rate in the market is estimated to be 6%,which of the following is likely to occur if rates increase to 7%?

• A) The supply of funds shifts to the right.
• B) The total supply of lending shifts to the right.
• C) The quantity of funds supplied is greater than the quantity of funds demanded.
• D) The quantity of funds demanded is greater than the quantity of funds supplied.

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Definitions:

Legislative Acts

Laws or statutes that have been formally enacted by a legislative body, such as a parliament or congress.

Townshend Acts

A series of laws passed by the British Parliament in 1767, imposing taxes on the American colonies for items like tea, glass, and paper.

Increase Revenues

refers to strategies or actions undertaken by a company or organization to boost the amount of money generated through its business activities.

Parliamentary Control

A system wherein the functioning and decision-making of government are overseen and directed by a parliamentary body.