In the market for loanable funds:
A. an increase in available bank lending will increase the interest rate.
B. a decrease in saving will reduce the interest rate.
C. an increase in borrowing for investment will increase the interest rate.
D. a decrease in government borrowing will increase the interest rate.
Answer: C
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The gap in GDP between the United States and Europe can be explained by the fact that
A) income taxes are higher in the United States. B) prices are higher in the United States. C) equilibrium employment is higher in Europe. D) the Okun Gap is larger in the United States. E) U.S. labor is more productive than European labor.
If Americans' home equity falls substantially, it would ____ wealth and consumer confidence, ____ consumption, and ____ aggregate demand
a. increase, decrease, increase b. decrease, decrease, decrease c. increase, increase, increase d. increase, increase, decrease
Which is NOT a function of money?
When the Fed sells government securities to a bank, the
A) bank's reserves increase. B) bank's reserves decrease. C) bank's reserves do not change. D) securities are an asset for the bank. E) b and d