The Private Supply of Credit Is an Increasing Function of the Real

question 30

Multiple Choice

The private supply of credit is an increasing function of the real interest rate if

• A) the substitution effects outweighs the income effects when added across all consumers.
• B) the income effects outweighs the substitution effects when added across all consumers.
• C) the income effect outweighs the substitution effects for borrowers.
• D) the substitution and income effects cancel each other.
• E) consumers are rational.

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