Reference: 1358
-(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 _______ trillion.

Question

Reference: 1358 
-(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 _______ trillion.

Quizplus · Accepted Answer

The exhibit shows a typical demand curve for capital, where as the interest rate decreases, the quantity demanded for capital increases. The movement from point A to point B represents a decrease in interest rate by 4 percentage points, which corresponds to a change in quantity demanded (not demand) of approximately $2.67 trillion. Therefore, choice B is the correct option. Option A and C suggest the change in demand, which is not accurate, while option D has an incorrect measure of the change in quantity demanded.

Reference: 1358 -(Exhibit: the Demand Curve for Capital)In the Movement from a Movement