Why is the demand for loanable funds downward sloping?
A) People save less when the interest rate is low.
B) More people borrow money when interest rates are low than when they are high.
C) Fewer investment projects have returns that can beat higher interest rates, so people are more willing to invest at higher interest rates.
D) People save more when the interest rate is high.
Ans: B) More people borrow money when interest rates are low than when they are high.
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