A technological breakthrough that increases the marginal productivity of capital will increase the:
A) demand for loanable funds, leading to a lower equilibrium market interest rate.
B) supply of loanable funds, leading to a lower equilibrium market interest rate.
C) demand for loanable funds, leading to a higher equilibrium market interest rate.
D) supply of loanable funds, leading to a higher equilibrium market interest rate.
E) supply of loanable funds, but have no impact on the equilibrium market interest rate.
Correct Answer:
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