If Saving Exceeds Investment Demand, and Consumption Is Not a Function

question 124

Multiple Choice

If saving exceeds investment demand, and consumption is not a function of the interest rate:

• A) the demand for loans exceeds the supply of loans.
• B) the interest rate will fall.
• C) the interest rate will rise.
• D) saving will fall.

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Definitions:

Net Operating Income

The income generated from a company's principal operations, calculated after deducting all operational expenses but before interest and taxes.

Break-Even

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

Sales Dollars

Revenue generated from the sale of goods and services, expressed in monetary units.

Break-Even

The point at which total costs and total sales are equal, resulting in no net loss or gain.