Use the Following to Answer Questions

question 398

Multiple Choice

Use the following to answer questions:
Figure: International Capital Flows
-(Figure: International Capital Flows) Look at the figure International Capital Flows. At an interest rate of 4%, the quantity of loanable funds demanded by British borrowers is _____ the quantity of loanable funds supplied by British lenders.

• A)greater than
• B)less than
• C)equal to
• D)not related to

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Definitions:

Preferred Stock

A class of ownership in a corporation that has a higher claim on its assets and earnings than common stock.

Tax Rate

The magnitude of tax imposition by the government on the revenue streams of individuals or enterprises.

Bond Rating

An assessment of credit quality provided by rating agencies, indicating the default risk of a bond issuer.