Why does increased productivity of capital shift the demand for loanable funds?
A) More productive capital generates more profits,reducing the need for firms to borrow money.
B) More productive capital means greater consumption of raw materials,which must be paid for with borrowed money.
C) More productive capital boosts competition,which leads to greater demand for loans to keep up with rival firms.
D) More productive capital reduces workers' incentive to work,which leads to greater demand for loans in order to pay workers more.
E) More productive capital earns more money,which justifies a higher interest rate on money borrowed to buy the capital.
Correct Answer:
Verified
Q147: List the factors of demand for loanable
Q148: List the factors of supply for loanable
Q149: Which factor may be expected to exert
Q150: What would be an example of increased
Q151: What does it mean if we say
Q153: Which event could be expected to shift
Q154: What is the effect of an increase
Q155: Explain the difference in the real and
Q156: Explain how the loanable funds market is
Q157: What will happen to the U.S.workforce over
Unlock this Answer For Free Now!
View this answer and more for free by performing one of the following actions
Scan the QR code to install the App and get 2 free unlocks
Unlock quizzes for free by uploading documents