International Finance And Treasury - Study Mode

[#541] If equilibrium interest rate decreases with respect to decrease in interest rate, then movement along supply of funds curve is
Correct Answer

(B) downside movement

Explanation

Solution: If equilibrium interest rate decreases with respect to decrease in interest rate, then movement along supply of funds curve is downside movement. The equilibrium interest rate is the rate at which the quantity of money demanded is equal to the quantity of money supplied. The Federal Reserve can alter the equilibrium interest rate by adjusting the supply of money. The demand for money and supply of money can be graphed to determine the equilibrium interest rate.

[#542] Plant and equipment are examples of
Correct Answer

(A) long term fixed assets

Explanation

Solution: Plant and equipment are examples of long term fixed assets. The term fixed assets generally refers to the long-term assets, tangible assets used in a business that are classified as property, plant and equipment.

[#543] Monetary expansion decreases and there is increase in equilibrium interest rate then supply curve of funds must shift
Correct Answer

(C) up and to left

Explanation

Solution: Monetary expansion decreases and there is increase in equilibrium interest rate then supply curve of funds must shift up and to left. Expansionary monetary policy is when a central bank uses its tools to stimulate the economy. That increases the money supply, lowers interest rates, and increases aggregate demand. It boosts growth as measured by gross domestic product.

[#544] Sum of past deficit of budget if accumulated is considered as
Correct Answer

(B) national debt

Explanation

Solution: Sum of past deficit of budget if accumulated is considered as national debt.

[#545] According to demand for funds curve, demand curve shifts down and to left if there is decrease in
Correct Answer

(D) equilibrium interest rate

Explanation

Solution: According to demand for funds curve, demand curve shifts down and to left if there is decrease in equilibrium interest rate. The equilibrium interest rate is the rate at which the quantity of money demanded is equal to the quantity of money supplied. The Federal Reserve can alter the equilibrium interest rate by adjusting the supply of money. The demand for money and supply of money can be graphed to determine the equilibrium interest rate.