Suppose that there is $3 trillion of savings in the economy currently offered for borrowing. Suppose that at an interest rate of 8% only $2.6 trillion is demanded in loans by businesses for investment. What happens to the remaining savings in the economy?
A) It is redirected toward individual consumption.
B) It lies idle.
C) It is redirected toward investment spending.
D) It is appropriated by the government.
Correct Answer:
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Q2: Classical economists believe that the tendency of
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Q4: In the classical view of the macroeconomy,
Q5: In the classical view of the macroeconomy,
Q6: In the classical view of the macroeconomy,
Q7: According to Classical Economics, the reasons all
Q8: Why do Classical Economists believe all savings
Q9: If the interest rate falls:
A) Savings will
Q10: If the interest rate rises:
A) Savings will
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