-Refer to Figure 9-5.An increase in the supply of loanable funds from S 1 to S 2 will,everything else equal,

An increase in the supply of loanable funds typically lowers the interest rate and increases investment spending, as more funds become available at a cheaper cost.

-Refer to Figure 9-5.An increase in the supply of loanable funds from S 1 to S 2 will,everything else equal,

An increase in the supply of loanable funds typically lowers the interest rate and increases investment spending, as more funds become available at a cheaper cost.

Solved

-Refer to Figure 9-5

Question 77

Multiple Choice

-Refer to Figure 9-5.An increase in the supply of loanable funds from S₁to S₂ will,everything else equal,

A) lower the interest rate to 6 percent and investment spending to $350 billion
B) leave the interest rate and investment spending unchanged
C) lower the interest rate to 6 percent and increase investment spending to $500 billion
D) lower the interest rate to 6 percent and increase investment spending to $550 billion
E) lower the interest rate to 6 percent and keep investment spending at $400 billion

Correct Answer: