The interest rate is determined by the
a. altruism or greed of bankers.
b. demand for loanable funds.
c. supply for loanable funds.
d. supply and demand for loanable funds.
D
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If a perfectly competitive firm manufacturing chairs decides to produce 100 more chairs, what happens to the market price of a chair?
What will be an ideal response?
What are the infant industry and dumping arguments for protection? Are they correct?
What will be an ideal response?
If you borrow money at a nominal interest rate of 5 percent and the inflation rate is 10 percent, what real interest rate will you pay?
a. -5 percent b. 0.5 percent c. 2 percent d. 5 percent e. 10 percent
The issue of bonds in corporate financing
a. is cheaper than stocks in the long run to the issuer. b. is riskier than stocks to the issuer. c. commits the issuer to make fixed annual payments even if profits are negative. d. All of the above are correct.