Final answer:
A loss is a decrease in equity due to an incidental transaction. In the financial market, a decline in interest rates is often due to an increase in the supply of money. Similarly, more loans are made and received when there is either an increase in demand or supply for loans.
Step-by-step explanation:
The decrease in equity due to an incidental transaction is referred to as a loss. A loss occurs when the total expenses exceed the total revenues from incidental or peripheral transactions unrelated to the main activities of the business. On the other hand, an expense is the outflow of resources from day-to-day operations, a gain represents an increase in equity from incidental transactions, and revenue is the income generated from the regular activities of the business.
In the context of the financial market, a decline in interest rates is typically caused by an increase in the supply of money or credit. Conversely, an increase in the quantity of loans made and received is usually prompted by either a rise in demand or a rise in supply of loans in the financial market.