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If an Economic Expansion in the Economy Caused an Increase

Question 178

Multiple Choice

If an economic expansion in the economy caused an increase in the demand for loanable funds, what would be the effect on the interest rate and the quantity of funds loaned in the credit market?


A) Interest rates would increase and the quantity of funds loaned would decrease.
B) Interest rates would decrease and the quantity of funds loaned would increase.
C) Interest rates and the quantity of funds loaned would decrease.
D) Interest rates and the quantity of funds loaned would increase.

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