In Canada, when new demand deposits are created through loans made to Canadians who borrow in order to invest in Canada
a. the Canadian money supply contracts
b. excess reserves in Canadian banks are destroyed
c. the money supply in Canada remains unchanged but the interest rate decreases favoring the Canadian investor
d. the money supply in Canada expands
e. the Canadian legal reserve requirement declines
D
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Income elasticity of demand is defined as
A) the change in income divided by the change in quantity. B) the change in price divided by the change in income. C) the percentage change in demand divided by the percentage change in income. D) the change in income multiplied by the change in quantity.
Which of the following could cause the supply curve of loanable funds to shift to the right?
a. increase in productivity b. increase in the rate of interest c. decrease in the rate of interest d. decrease in productivity e. expectation that future prices will decrease