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Other Things Equal, an Increase in the Productivity of Capital

Question 158

Multiple Choice

Other things equal, an increase in the productivity of capital goods will


A) increase the demand for loanable funds and decrease the equilibrium interest rate.
B) increase the demand for loanable funds and increase the equilibrium interest rate.
C) increase the supply of loanable funds and decrease the equilibrium interest rate.
D) increase the supply of loanable funds and increase the equilibrium interest rate.

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