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Suppose the Market for Loanable Funds Is in Equilibrium

Question 15

Multiple Choice

Suppose the market for loanable funds is in equilibrium.If expected profit falls, the equilibrium real interest rate _______ and the equilibrium quantity of loanable funds _______.


A) falls; decreases
B) rises; increases
C) falls; increases
D) rises; decreases
E) falls; increases or decreases but we don't know for sure

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