does a rise in the real interest rate decrease the quantity of loanable funds demanded? The quantity of loanable funds demanded decreases because at a higher interest rate _______. A. fewer projects have an expected rate of profit below the real interest rate B. more projects have an expected rate of profit that exceeds the real interest rate C. banks want to lend more
does a rise in the real interest rate decrease the quantity of loanable funds demanded? The quantity of loanable funds demanded decreases because at a higher interest rate _______. A. fewer projects have an expected rate of profit below the real interest rate B. more projects have an expected rate of profit that exceeds the real interest rate C. banks want to lend more
Chapter21: Financial Markets, Saving, And Investment
Section: Chapter Questions
Problem 6P
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Why, other things remaining the same, does a rise in the real interest rate decrease the quantity of loanable funds demanded? The quantity of loanable funds demanded decreases because at a higher interest rate _______.
A. fewer projects have an expected rate of profit below the real interest rate
B. more projects have an expected rate of profit that exceeds the real interest rate
C. banks want to lend more
D. fewer projects have an expected rate of profit that exceeds the real interest rate
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