According to Classical Economists,if the Amount of Funds Households Save

question 165

Multiple Choice

According to classical economists,if the amount of funds households save is greater than the amount of funds firms invest,then

• A) the interest rate will fall,ultimately moving to a level where the amount of funds households plan to save equals the amount of funds firms plan to invest.
• B) the interest rate will rise,ultimately moving to a level where the amount of funds households plan to save equals the amount of funds firms plan to invest.
• C) the interest rate will remain constant and people will simply buy more goods.
• D) more money will he used for leisure purposes,since households save in order to consume leisure at some later time.
• E) none of the above

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