Suppose That There Is an Increase in Future Expected Disposable

Multiple Choice

Suppose that there is an increase in future expected disposable income and simultaneously an increase in the profitability of investment.As a result, the equilibrium real interest rate ________ and the equilibrium quantity of loanable funds ________.

A) rises; might increase, decrease, or not change
B) rises; increases
C) rises; decreases
D) falls; might increase, decrease, or not change
E) falls; increases