Suppose That Consumers Decide to Save Less and Spend More

question 94

Multiple Choice

Suppose that consumers decide to save less and spend more. What effect would this have in the market for loanable funds?

• A)It will increase interest rates and the quantity of funds lent will rise.
• B)It will decrease interest rates and the quantity of funds lent will rise.
• C)It will increase interest rates and the quantity of funds lent will fall.
• D)It will decrease interest rates and the quantity of funds lent will fall.

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Definitions:

Psychological Approach

A method or perspective for understanding behavior and mental processes through psychological principles and theories.

Immediate Experience

Direct, unmediated interaction with the environment or a situation.

Trained Introspectors

Individuals who have been trained to carefully examine and report on their own thoughts and feelings.

Wilhelm Wundt

A German psychologist who is considered the father of experimental psychology; he founded the first psychological laboratory.