Which of the following is likely to happen if people suddenly become more willing to lend money?
a. An increase in demand for loanable funds will increase the interest rate
b. An increase in the supply of loanable funds will increase the interest rate.
c. An increase in the supply of loanable funds will decrease the interest rate.
d. An increase in demand for loanable funds will decrease the interest rate.
e. A simultaneous increase in both the supply of and demand for loanable funds makes it impossible to predict what will happen to the rate of interest.
c
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When Maria deposits $100 in currency in her checkable deposit at Bank of America, the immediate effect is that the quantity of M1
A) decreases. B) does not change. C) increases. D) changes, but the direction of the change depends on whether the deposit was accepted by a thrift institution or a commercial bank. E) changes only if Bank of America does not have excess reserves.
According to mainstream economists the basic determinant of real output, employment, and the price level is
A. the incentive to work, save, and invest. B. the level of aggregate expenditures. C. the supply of money. D. information and people's expectations.