Assume the market for loanable funds is in equilibrium at 5 percent interest.Assuming that firms become more pessimistic about future profits,all else being equal,
A) the equilibrium interest rate would rise and the equilibrium quantity would fall.
B) both the equilibrium interest rate and the equilibrium quantity would rise.
C) both the equilibrium interest rate and the equilibrium quantity would fall.
D) the equilibrium interest rate would fall and the equilibrium quantity would rise.
E) the equilibrium real rate of interest would become negative and the equilibrium quantity would remain unchanged.
Correct Answer:
Verified
Q96: A young boy is saving money for
Q97: If life expectancy falls due to AIDS
Q98: Based on the relationship between consumption and
Q99: Your roommate arrives home and says,"I am
Q100: Higher education
A) will generally result in higher
Q102: If everyone began feeling better about the
Q103: The supply of loanable funds increases while
Q104: The demand for loanable funds decreases while
Q105: Which combination of events could have caused
Q106: One argument that is made concerning the
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