Which Combination of Events Could Have Caused the Equilibrium Interest

question 149

Multiple Choice

Which combination of events could have caused the equilibrium interest rate to rise and the equilibrium quantity of loanable funds (both borrowed and lent) to fall?

• A) A baby boom begins,and investor confidence falls.
• B) A baby boom begins,and investor confidence rises.
• C) People have lower time preferences,and governments run larger deficits.
• D) People have lower time preferences,and capital is more productive.
• E) A baby boom begins,and people have higher time preferences.

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Definitions:

Positive Correlation

A relationship between two variables where both variables move in the same direction.

Work-Related Stress

The stress experienced due to factors in the workplace, including workload, lack of support, or job insecurity.

Marital Happiness

The state of experiencing joy and satisfaction in a marriage, often measured through emotional, physical, and social well-being.

Negative Correlation

A bond between two variables in which the elevation of one results in the reduction of the other.