Asked by Vaishnavi Surnis on Apr 24, 2024
Suppose many businesses want to increase their stock of capital goods and decide to borrow funds to do it. Which would be the likely result of this event?
A) Interest rates would increase.
B) Interest rates would decrease.
C) The equilibrium quantity of loanable funds would decrease.
D) The equilibrium quantity of loanable funds would remain unchanged.
Capital Goods
Long-lasting goods acquired or manufactured by a business that are used to produce other goods or services.
Interest Rates
The percentage charged on borrowed funds or paid on deposits over time, reflecting the cost of borrowing or the reward for saving.
- Acquire knowledge about the link between the selection of investments and the variations in interest rates.
Learning Objectives
- Acquire knowledge about the link between the selection of investments and the variations in interest rates.