A Decrease in Saving That Leads to an Increase in the Interest

question 3

Multiple Choice

A decrease in saving that leads to an increase in the interest rate will

• A) decrease the amount of investment spending.
• B) only result in a surplus of loanable funds.
• C) shift the demand for loanable funds to the right, increasing net investment.
• D) shift the demand for loanable funds to the left, causing a decrease in investment.

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Definitions:

Manufacturing Expense

Costs directly associated with the production of goods, including materials, labor, and factory overhead expenses.

Single Product

A business strategy or production model focused on the manufacture or sale of one specific product.

Production Cost

The total expense incurred in manufacturing a product, including raw materials, labor, and overheads.

Postponement

A strategy in supply chain management that delays the final production or distribution of a product until customer orders are received to reduce inventory costs.