Which Combination of Events Could Have Caused the Equilibrium Interest

question 173

Multiple Choice

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

• A) Firms are more pessimistic,and governments run fewer deficits.
• 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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