Other Things Equal, a Decrease in the Z Factors ________

question 90

Multiple Choice

Other things equal, a decrease in the Z factors ________ the equilibrium interest rate and ________ equilibrium output.

• A) increases; increases
• B) increases; decreases
• C) decreases; increases
• D) decreases; decreases

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Definitions:

Efficiency

The ratio of the output generated to the input used, expressing the effectiveness of a system or process in utilizing resources.

Break Even

The point at which total revenues equal total costs, resulting in no profit or loss.

Variable Costs

Costs that change in direct proportion to the level of production or business activity.

Profit

The financial gain or return derived from an investment, transaction, or operation after subtracting all costs, expenses, and taxes.