The supply of loanable funds schedule shows that the
A) higher the real interest rate, the more the supply of loanable funds curve shifts rightward.
B) higher the real interest rate, the greater the quantity of loanable funds supplied.
C) higher the real interest rate, the greater the opportunity cost of supplying loanable funds.
D) higher the real interest rate, the lower the profit from making new investment.
E) lower the real interest rate, the greater the quantity of loanable funds supplied.
B
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If a currency union lowers the cost of trade and therefore promotes increased trade, the Euro-optimists believe that:
A) a currency union at some point will no longer be necessary. B) at some point the OCA criteria will be satisfied. C) the benefits of having an independent monetary policy will outweigh the benefits from the currency union. D) the currency union may never be beneficial to an individual nation, but it does reduce political tension in large regions.
The income effect explains why there is a direct relationship between the price of a product and the quantity of the product demanded
Indicate whether the statement is true or false