Which of the following statements is FALSE?
A) The lower the interest rate, the smaller the quantity of loans demanded.
B) The higher the interest rate, the greater the price paid to borrow money.
C) Businesses are sensitive to the interest rate in making investment decisions.
D) An increase in the demand for loans from financial depository institutions increases the interest rate on those loans.

Question

Quizplus · Accepted Answer

The statement "The lower the interest rate, the smaller the quantity of loans demanded" is false because typically, the lower the interest rate, the greater the quantity of loans demanded, as borrowing is cheaper.

Which of the Following Statements Is FALSE