The interest rate equilibrium is decreased and the supply curve of funds shift to the right is the result of ___________?
Correct answer: A. increase in total wealth
- A. increase in total wealth
- B. decrease in total wealth
- C. increase in future value
- D. decrease in future valueCredit & Lending
Explanation
An increase in total wealth generally increases saving and the supply of loanable funds, shifting the supply curve rightward and lowering the equilibrium interest rate. A fall in future value would usually reduce saving rather than increase it.
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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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