Which of the Following Explains Why the Demand for Loanable

question 13

Multiple Choice

Which of the following explains why the demand for loanable funds is negatively related to the real interest rate?

• A)Consumers are willing to spend less and hence save more at higher real interest rates.
• B)Interest rate flexibility in financial markets assures an equilibrium in which saving equals investment.
• C)A lower real interest rate makes more investment projects profitable.
• D)All of the above are reasons why the demand for loanable funds is negatively related to the real interest rate.

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Definitions:

Maxillary

Pertaining to the maxilla or the upper jaw bone, which plays a key role in the formation of the upper dental arch and assists in forming the boundaries of three facial cavities: the roof of the mouth, the floor of the orbit, and the sides and floor of the nasal cavity.

Nasal

Pertaining to the nose and its functions or structures.

Lacrimal

Pertaining to tears or the tear apparatus, including the production and drainage of tears.

Axial Skeleton

The central part of the skeleton, comprising the skull, spine, ribs, and sternum.