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The Demand Curve for Loanable Funds Slopes Downward to the Right

Question 12

Multiple Choice

The demand curve for loanable funds slopes downward to the right because


A) there are more projects that are profitable at low than at high rates of interest.
B) firms borrow money only when interest rates are low.
C) an increase in the supply of loanable funds generally raises interest rates.
D) the lower the asset's rate of return, the higher the interest rate.
E) money is not as profitable when its price is high.

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