Fred is considering expanding his dress shop. Which of the following will happen if interest rates rise?
A) He is less likely to expand. This illustrates why the supply of loanable funds slopes downward.
B) He is more likely to expand. This illustrates why the supply of loanable funds slopes upward.
C) He is less likely to expand. This illustrates why the demand for loanable funds slopes downward.
D) He is more likely to expand. This illustrates why the demand for loanable funds slopes upward.
Correct Answer:
Verified
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