Other Things the Same,if the U

question 87

Multiple Choice

Other things the same,if the U.S.interest rate falls,then U.S.residents will want to purchase

• A)more foreign assets,which increases the quantity of loanable funds demanded.
• B)fewer foreign assets,which decreases the quantity of loanable funds demanded.
• C)more foreign assets,which increase the quantity of loanable funds supplied.
• D)fewer foreign assets,which decreases the quantity of loanable funds supplied.

---

Definitions:

ROCE

Return on Capital Employed; a financial ratio that measures a company's profitability and the efficiency with which its capital is used.

Financing Charges

Interest and other costs associated with borrowing funds or purchasing goods and services on credit.

ROE

Return on Equity; a financial ratio that measures the profitability of a company in relation to the amount of equity, indicating how effectively shareholder equity is being utilized to generate profits.

Financial Leverage

Employing borrowed funds to amplify the potential gains from an investment, while also elevating the likelihood of incurring losses.