The equilibrium interest rate decreases and the economic conditions increases then supply curve must shift to ____________?
Correct answer: D. down and to the right
- A. up and to the left
- B. up and to the right
- C. down and to the left
- D. down and to the right
Explanation
A lower equilibrium interest rate, assuming demand is unchanged, indicates an increase in the supply of loanable funds. An increase in supply shifts the curve down and to the right.
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Business finance explains how organisations plan, obtain and use money while balancing risk, return and liquidity. Topics include financial statements, time value of money, budgeting, working capital, capital structure, sources of finance, investment appraisal and cost of capital. Capital budgeting evaluates long-term projects, whereas working capital manages day-to-day operations.
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