Question
38. (04.07 MC) If the sum of household, business, and government demands for funding exceeds the availability of savings from households, business, government, and foreign
38.
(04.07 MC) If the sum of household, business, and government demands for funding exceeds the availability of savings from households, business, government, and foreign sources, which of the following can be expected? (1 point)
| The real interest rate should decrease to equate demand for funding and savings. | |
| The government will be required to increase its taxes to supplement funding its government expenditures. | |
| Businesses will accelerate their depreciation of existing capital to increase their desired investment to equate the demand and supply of funding. | |
| There will be an excess demand for funding, leading to an increase in the real interest rate to equate demand and supply for funds. | |
| The government will increase the issuance of new bonds to offset the overall deficiency in the supply of funds. |
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International Accounting
Authors: Timothy Doupnik, Hector Perera
3rd Edition
978-0078110955, 0078110955
