An increase in borrower net worth will result in
A)higher output and a higher real interest rate.
B)higher output, but a lower real interest rate.
C)lower output and a lower real interest rate.
D)lower output, but a higher real interest rate.

Question

Quizplus · Accepted Answer

An increase in borrower net worth typically leads to higher output because borrowers are more creditworthy and can invest more, stimulating economic activity. This increased demand for funds can also lead to a higher real interest rate.

An Increase in Borrower Net Worth Will Result in