Use the following to answer question(s): The Demand Curve for Capital

-(Exhibit: The Demand Curve for Capital) In the movement from A to B, a fall in the interest rate of _______ percentage points, resulted in an increase in the _______ for capital of _______ billion.

Question

Use the following to answer question(s): The Demand Curve for Capital
 
-(Exhibit: The Demand Curve for Capital) In the movement from A to B, a fall in the interest rate of _______ percentage points, resulted in an increase in the _______ for capital of _______ billion.

Quizplus · Accepted Answer

The exhibit shows a demand curve for capital, where the vertical axis measures the interest rate and the horizontal axis measures the quantity of capital. The movement from point A to point B represents a decrease in the interest rate by 4 percentage points (from 10% to 6%), which results in an increase in the quantity demanded of capital. Since it is a movement along the demand curve, the terminology "quantity demanded" is appropriate. The increase is approximately $2.67 billion, as shown by the horizontal distance between point A and point B. Therefore, the correct answer is B, 4; quantity demanded; about $2.67.

Use the Following to Answer Question(s): the Demand Curve for Capital