Suppose households decide to reduce savings because they want to enjoy more present time than future time. In this case, the loanable funds model predicts that
A) interest rate goes down, and quantity of borrowed funds increases.
B) interest rate goes down, and quantity of borrowed funds decreases.
C) interest rate goes up, and quantity of borrowed funds decreases.
D) interest rate goes up, and quantity of borrowed funds increases.
C
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A local restaurant sells strawberry pie for $3.00 per slice. However, if you order the prime rib dinner, you can get a slice of pie for only a dollar. This is an example of
A) bundling. B) second-degree price discrimination. C) a two-part tariff. D) tying. E) none of the above
Two cities A&B are deciding upon joint pollution laws. Right now they both face identical prices for their housing. If they decide that city A is to be a pollution free city "Clean town" and all the factories would locate in city B "Smogville", in the long run, we expect to see
a. Asthmatics moving to Cleantown b. Poorer families moving to Smogville c. Residents in both the cities relocating based on their tolerance for pollution d. All of the above
A tariff has the effect of giving ________ a larger share of the domestic market
a. domestic consumers b. foreign consumers c. domestic producers d. foreign producers e. no producers or consumers
Which of the following would NOT be expected to increase labor productivity?
A. Technological advance B. The acquisition of more education and training by the labor force C. An increase in the size of the labor force D. The realization of economies of scale