When the Interest Rate Is Above Equilibrium, There Is Excess

question 157

Short Answer

When the interest rate is above equilibrium, there is excess _____ of money. Households will _____ interest-earning assets, which _____ the interest rate.

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Definitions:

Mutual Fund

An investment vehicle made up of a pool of funds collected from many investors for the purpose of investing in securities such as stocks, bonds, and other assets.

Vicarious Liability

A legal doctrine holding an individual or entity liable for the actions of another, based on the relationship between them, such as employer-employee.

Ultra Vires Rule

A legal doctrine that acts performed beyond the scope of a corporation's or entity's powers are invalid.

Business Judgment Rule

A legal principle that protects the decisions made by a corporation's board of directors from being challenged in court, provided they were made in good faith and with reasonable care.