Borrowers are ________ of loanable funds, and lenders are ________ of loanable funds

The marginal productivity theory of income distribution states that

A) income distribution is determined by the marginal productivity of the factors of production that individuals own. B) as more and more units of labor are added to a fixed quantity of capital, eventually labor's contribution to a firm's income will decrease. C) factors of production in short supply command higher prices than those available in abundant quantities. D) capital owners receive the bulk of a nation's income because capital-intensive production generates productivity gains.

A higher nominal interest rate ________ the profit-maximizing level of MPK for firms, leading firms to a ________ capital-output ratio, thus ________ net investment

A) raises, higher, raising B) raises, lower, lowering C) lowers, higher, raising D) lowers, higher, lowering E) lowers, lower, raising