If Congress were to pass a law exempting interest on saving from taxation, the
A) supply of loanable funds would decrease and the equilibrium interest rate would rise.
B) supply of loanable funds would increase and the equilibrium interest rate would fall.
C) demand for loanable funds would increase and the equilibrium interest rate would rise.
D) equilibrium interest rate would be unaffected.
Correct Answer:
Verified
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