Suppose While Households Are Deciding to Increase Saving,the Demand by Firms

question 276

Multiple Choice

Suppose while households are deciding to increase saving,the demand by firms for investment funds falls.In the market for loanable funds the real interest rate will ___ and the quantity of loanable funds will _____.

• A) rise;fall
• B) rise;rise
• C) fall;rise,fall,or stay the same
• D) rise,fall,or stay the same;rise.

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Definitions:

Raw Materials

The basic substances in their natural, modified, or semi-processed state used in the production or manufacturing of goods.

Cash Account

A financial account that tracks cash transactions, including both receipts and disbursements.

Direct Labor Costs

Wages and other forms of compensation paid to employees who are directly involved in the production of goods.

Labor Efficiency Variance

The difference between the actual labor hours worked and the standard labor hours expected for the level of production achieved.