An Increase in the Interest Rate,other Things Constant,will

question 41

Multiple Choice

An increase in the interest rate,other things constant,will:

• A)shift the supply of loanable funds curve to the left.
• B)shift the supply of loanable funds curve to the right.
• C)increase the quantity of loanable funds supplied.
• D)shift the demand for loanable funds curve to the left.
• E)increase the quantity of loanable funds demanded.

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Definitions:

Minimum Return

The lowest acceptable return on an investment, set by an investor or implied by a financial model or market expectation.

Residual Income

The amount of net income an entity generates beyond its required rate of return on its investments.

Invested Assets

Assets that a company or individual allocates resources toward with the expectation of generating a future benefit or income.

Maximum Return

The highest possible profit or gains that can be achieved from an investment or business venture.