Multiple Choice
Which of the following best describes the effects of an increase in the real interest rate?
A) It discourages people from saving and so increases the quantity of loanable funds demanded.
B) It discourages people from saving and so decreases the quantity of loanable funds demanded.
C) It encourages people to save and so increases the quantity of loanable funds supplied.
D) It encourages people to save and so decreases the quantity of loanable funds supplied.
Correct Answer:
Verified
Correct Answer:
Verified
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