Suppose households decide to reduce savings because they want to enjoy more present time than future time. In this case, the loanable funds model predicts that
A) interest rate goes down, and quantity of borrowed funds increases.
B) interest rate goes down, and quantity of borrowed funds decreases.
C) interest rate goes up, and quantity of borrowed funds decreases.
D) interest rate goes up, and quantity of borrowed funds increases.
C
Economics
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The largest category of financial intermediary is the
A) commercial banks. B) savings-and-loans. C) insurance companies. D) mutual funds.
Economics
In the monetarist view, a bond-financed increase in government spending would have a strong effect on real output in
a. both the short run and the long run. b. the short run but not the long run. c. the long run but not the short run. d. neither the short run nor the long run.
Economics