Multiple Choice
As a government adopts a contractionary fiscal policy:
A) the demand for loanable funds increases causing interest rates to rise.
B) the demand for loanable funds decreases causing interest rates to fall.
C) the supply of loanable funds increases causing interest rates to rise.
D) the supply of loanable funds decreases causing interest rates to fall.
E) interest rates do not change.
Correct Answer:
Verified
Correct Answer:
Verified
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