If Foreign Entities Save More and Businesses Become More Optimistic

question 126

Multiple Choice

If foreign entities save more and businesses become more optimistic about the future,we would correctly say that

• A) the new equilibrium quantity of loanable funds would decrease,but we would be unable to tell if the new equilibrium interest rate would be higher or lower than the original.
• B) the new equilibrium quantity of loanable funds would increase,but we would be unable to tell if the new equilibrium interest rate would be higher or lower than the original.
• C) the new equilibrium quantity of loanable funds would be indeterminate,but we would be certain the new equilibrium interest rate would be higher than the original.
• D) the new equilibrium quantity of loanable funds would be indeterminate,but we would be certain the new equilibrium interest rate would be less than the original.
• E) based on this information and because both changes would affect the demand for loanable funds in the opposite way,we would be unable to say anything about the relationship of the new equilibrium interest rate and quantity to the original interest rate and quantity.

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Definitions:

Carrying Capacity

The maximum population size of a species that an environment can sustain indefinitely, given the food, habitat, water, and other necessities available.

Distribution Pattern

The spatial arrangement of organisms within a particular ecoy or habitat, influenced by environmental factors and species interactions.

Environmental Factor

An element of the physical or biological world that can influence the survival, development, or evolution of organisms.

Competition

An ecological interaction where individuals or species compete for limited resources, affecting their growth and survival.