Policies to promote growth by increasing savings and investment work through:
A)decreasing the supply of loanable funds, lowering the interest rate, raising the level of investment in physical capital.
B)increasing the supply of loanable funds, increasing the interest rate, raising the level of investment in physical capital.
C)increasing the supply of loanable funds, lowering the interest rate, lowering the level of investment in physical capital.
D)increasing the supply of loanable funds, lowering the interest rate, raising the level of investment in physical capital.

Question

Quizplus · Accepted Answer

Policies to promote growth by increasing savings and investment work through increasing the supply of loanable funds, which lowers the interest rate and raises the level of investment in physical capital. This is because lower interest rates make it cheaper for firms to borrow and invest in new capital projects, which in turn increases economic growth. Thus, increasing the supply of loanable funds, lowering the interest rate, and raising the level of investment in physical capital are all policies that work together to promote economic growth.

Policies to Promote Growth by Increasing Savings and Investment Work