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25 March, 08:54

People gain confidence that the economy is growing and that their jobs are secure. How does this impact the demand for financial capital? Select the correct answer below: The demand for financial capital increases. The demand for financial capital decreases. The demand is not affected.

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  1. 25 March, 10:12
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    The answer is the demand for financial capital decreases.

    Explanation:

    The people gain confidence that the economy is growing and that their jobs are secure only if the demand for financial capital decreases.

    According to the law of supply, a higher price increases the quantity supplied and if the interest rate on credit cards falls, then the quantity of financial capital supplied in the credit card market will decrease and quantity demanded will fall.

    The financial market brings all the buyers and sellers together to trade in financial assets. The capital markets are used for long term are those with maturities of greater than one year.

    The financial capitals are like money, stocks, gold or bonds that are not used by everyone.
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