If at a Given Real Interest Rate Desired National Saving

question 33

Multiple Choice

If at a given real interest rate desired national saving is $200 billion,domestic investment is $100 billion,and net capital outflow is $80 billion,then at that real interest rate in the loanable funds market there is a

• A)surplus.The real interest rate will rise.
• B)surplus.The real interest rate will fall.
• C)shortage.The real interest rate will rise.
• D)shortage.The real interest rate will fall.

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Definitions:

Payback Period

The duration of time it takes for an investment to generate an amount of income or cash flow equal to the cost of the investment.

Salvage Value

The estimated residual value of an asset at the end of its useful life.

Old Equipment

Refers to machinery or technology that has become outdated or has surpassed its effective service life but may still be in use.

Salvage Value

The projected remaining worth of an asset once it has reached the end of its operational lifespan.