A Higher Interest Rate Makes _____ More Attractive

question 138

Short Answer

A higher interest rate makes _____ more attractive. Therefore the quantity of loanable funds supplied increases.

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Definitions:

Retained Earnings

The portion of a company's profits that is kept or retained and not distributed to shareholders as dividends.

Accumulated Profit

The total amount of net income retained in a company over its entire history, not distributed as dividends.

Liquidation

The process of converting assets into cash or cash equivalents by selling them.

Dividends

Awards made by a business to its shareholders, usually resulting from the disbursement of profits.