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

Question

Quizplus · Accepted Answer

Policies to promote growth by increasing saving and investment work through increasing the supply of loanable funds by encouraging saving and reducing consumption. This leads to a decrease in the interest rate, making it cheaper to borrow money for investment in physical capital. Therefore, the correct choice is increasing the supply of loanable funds, lowering the interest rate, and raising the level of investment in physical capital, as mentioned in option D.

Policies to Promote Growth by Increasing Saving and Investment Work