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1 Finance MCQs

An increase in the equilibrium interest rate with the supply curve of funds shifting left or upward is caused by ____________?

  • Increase in future value
  • Decrease in future value
  • Increase in total wealth
  • Decrease in total wealth
0 Comments
Correct Answer: D. Decrease in total wealth

Explanation:

When total wealth decreases, the supply of funds available for lending reduces, shifting the supply ... Read More Details

2 Finance MCQs

Suppliers, fund consumers, foreign participants, and government intermediaries are all participants of ____________?

  • Financial markets
  • Setting interest rate
  • Setting compounding rate
  • Setting savings rate
0 Comments
Correct Answer: A. Financial markets

Explanation:

Financial markets involve multiple participants who interact to facilitate the flow of funds. Suppliers provide ... Read More Details

3 Finance MCQs

According to the loanable funds theory, who are the main net suppliers of fund

  • Insurance companies
  • Government
  • Corporations
  • Households
0 Comments
Correct Answer: D. Households

Explanation:

According to the loanable funds theory, households are the primary net suppliers of funds because ... Read More Details

4 Finance MCQs

In financial markets, a decrease in investment causes ____________?

  • Increase in interest rate
  • Decrease in interest rate
  • Increase in availability of funds
  • Decrease in availability of funds
0 Comments
Correct Answer: C. Increase in availability of funds

Explanation:

When investment decreases, fewer borrowers compete for funds in the financial market. This lowers the ... Read More Details

5 Finance MCQs

Accounts receivable and inventory are examples of ____________?

  • Short-term working capital
  • Long-term working capital
  • Long-term fixed assets
  • Short-term fixed assets
0 Comments
Correct Answer: A. Short-term working capital

Explanation:

Accounts receivable and inventory are considered short-term working capital because they are current assets that ... Read More Details

6 Finance MCQs

If the risk of a financial security decreases and the supply curve shifts right and downward, what happens to the equilibrium interest rate?

  • Remain constant
  • Fluctuate
  • Decrease
  • Increase
0 Comments
Correct Answer: C. Decrease

Explanation:

When the risk of a financial security decreases, lenders are more willing to provide funds, ... Read More Details

7 Finance MCQs

When the interest rate is lower than the equilibrium rate, the financial system has ____________?

  • Surplus of funds
  • Deficit of funds
  • Short-term funds
  • Long-term funds
0 Comments
Correct Answer: B. Deficit of funds

Explanation:

If the interest rate is below the equilibrium rate, the cost of borrowing is low, ... Read More Details

8 Finance MCQs

If the demand for loanable funds decreases, the borrowing cost of funds becomes ____________?

  • Upside
  • Lower
  • Higher
  • Zero
0 Comments
Correct Answer: B. Lower

Explanation:

When the demand for loanable funds decreases, fewer borrowers are competing for funds. This reduction ... Read More Details

9 Finance MCQs

To avoid a shortage of funds, the relationship between funds supplied and funds demanded must be ____________?

  • Two-way relationship
  • One-way relationship
  • Direct relationship
  • Inverse relationship
0 Comments
Correct Answer: C. Direct relationship

Explanation:

To prevent a shortage of funds, the amount of funds supplied must correspond to the ... Read More Details

10 Finance MCQs

Plants and equipment are examples of ____________?

  • Long-term fixed assets
  • Short-term fixed assets
  • Short-term working capital
  • Long-term working capital
0 Comments
Correct Answer: A. Long-term fixed assets

Explanation:

Plants and equipment are considered long-term fixed assets because they are tangible assets used in ... Read More Details