The Demand for Loanable Funds Increases by the Exact Same

question 102

Multiple Choice

The demand for loanable funds increases by the exact same percentage that the supply of loanable funds decreases.This would cause the equilibrium

• A) quantity of loanable funds to decrease and the equilibrium interest rate to increase.
• B) quantity of loanable funds to increase and the equilibrium interest rate to decrease.
• C) quantity of loanable funds to increase,but the effect on the equilibrium interest rate would be uncertain.
• D) interest rate to increase,resulting in a new higher equilibrium quantity.
• E) interest rate to increase,but the equilibrium quantity would remain unchanged.

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Definitions:

Pitch

A presentation or proposal designed to persuade or inform its audience.

Roof

The structure that covers or forms the top of a building or vehicle to provide protection from the weather.

Slope

A measure of the steepness or incline of a line, defined as the ratio of the vertical change to the horizontal change between two points on the line.

Graph

A graphical representation of data, functions, or equations, typically plotted on a coordinate system.