A change in the tax laws which increases the supply of loanable funds will have a bigger effect on investment when
A) the demand for loanable funds is more elastic and the supply of loanable funds is more inelastic.
B) the demand for loanable funds is more inelastic and the supply of loanable funds is more elastic.
C) both the demand for and supply of loanable funds are more elastic.
D) both the demand for and supply of loanable funds are more inelastic.
Correct Answer:
Verified
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