Multiple Choice
Suppose that there is $3 trillion of savings in the economy currently offered for borrowing. Suppose that at an interest rate of 8% only $2.6 trillion is demanded in loans by businesses for investment. What happens to the remaining savings in the economy?
A) It is redirected toward individual consumption.
B) It lies idle.
C) It is redirected toward investment spending.
D) It is appropriated by the government.
Correct Answer:
Verified
Correct Answer:
Verified
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