Which of the following is likely to lead to an increase in the cost of funds? Qu

Question

Which of the following is likely to lead to an increase in the cost of funds? Question 15 options: 1) Firms' production opportunities decline, leading to a decline in the demand for funds. 2) Households save a larger portion of their income. 3) Households increase the amount of money they borrow from their local banks. 4) Statements a and b are correct. Which of the following is likely to lead to an increase in the cost of funds? Which of the following is likely to lead to an increase in the cost of funds? 1) Firms' production opportunities decline, leading to a decline in the demand for funds. 2) Households save a larger portion of their income. 3) Households increase the amount of money they borrow from their local banks. 4) Statements a and b are correct. 1) Firms' production opportunities decline, leading to a decline in the demand for funds. 2) Households save a larger portion of their income. 3) Households increase the amount of money they borrow from their local banks. 4) Statements a and b are correct. 1) Firms' production opportunities decline, leading to a decline in the demand for funds. 2) Households save a larger portion of their income. 3) Households increase the amount of money they borrow from their local banks. 4) Statements a and b are correct.

Explanation / Answer

Firms' production opportunities decline, leading to a decline in the demand for funds.

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