Final answer:
Improved operational efficiency increases ROI and Residual Income by reducing costs and increasing profits. In the financial market, a rise in the supply of money leads to a decline in interest rates, while a rise in demand for loans increases the quantity of loans made and received.
Step-by-step explanation:
The factor that increases Return on Investment (ROI) and Residual Income is c) Improved operational efficiency. This is because when a company operates more efficiently, it can reduce costs and increase profits, thereby boosting its ROI and residual income. None of the other options, such as decreased market demand, increased advertising costs, or reduced employee satisfaction, are generally associated with an increase in ROI and residual income.
When considering the changes in the financial market that lead to a decline in interest rates, the correct answer is c) a rise in supply. An increased supply of money in the financial markets typically pushes down the interest rates. Conversely, an increased demand for money can lead to higher interest rates.
Regarding the changes that will lead to an increase in the quantity of loans made and received, the correct answer is a) a rise in demand. As the demand for loans rises, banks and other financial institutions are more likely to increase their lending, which raises the quantity of loans made and received.