Which of the Following Would Be the Most Likely to Cause

question 251

Multiple Choice

Which of the following would be the most likely to cause an increase in the demand for loanable funds?

• A) a decrease in the interest rate
• B) an increase in savings
• C) a decrease in consumption
• D) an increase in government borrowing

---

Definitions:

Perfectly Competitive

A market structure characterized by a large number of buyers and sellers, homogenous products, free entry and exit, and perfect information.

Long-Run Equilibrium

A state in which all factors of production and variables in the market are at a balance, with no external pressures causing change in the short term.

Economic Profit

A measure of profit that includes all costs, including both the explicit costs of inputs and the implicit costs of capital.

Short-Run Loss

A situation where a firm's total revenues are less than its total costs within a short period, not allowing all factors of production to vary.