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In the Loanable Funds Market

Question 2

Multiple Choice

In the loanable funds market


A) demand is downward sloping because lower interest rates make more capital projects profitable.
B) supply is vertical because loanable funds are fixed in any relevant time frame.
C) demand for loanable funds shifts right if the interest rate falls.
D) demand for loanable funds shifts right in the interest rate rises.

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