Final answer:
The production of goods to produce other goods is referred to as capital. In the financial market, this is achieved through actions such as issuing stocks and bonds. An increase in the supply of loans leads to an increase in the quantity of loans made and received.
Step-by-step explanation:
The production of goods that will be used to produce other goods is known as capital. Items like office buildings, machinery, and tools are examples of capital. In the financial market, entities such as banks and firms engage in activities like accepting deposits, making loans, issuing stocks and bonds, and involving in investments to raise capital. This is crucial for the smooth functioning and expansion of businesses.
Now, looking at the options presented for the financial market, an increase in the quantity of loans made and received can be significantly affected by both a rise in demand for loans and a rise in the supply of loans. However, the correct answer would be a rise in supply, as this directly increases the quantity of loans that lenders are willing to provide.