A tax on interest income
A) decreases the supply of loanable funds and has no influence on the real interest rate.
B) increases the demand for loanable funds and raises the real interest rate.
C) increases the supply of loanable funds and lowers the real interest rate.
D) has no effect on the demand for loanable funds.
E) decreases the demand for loanable funds but does not change the real interest rate.
Correct Answer:
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