What Would Happen, All Else Equal, in the Market for Loanable

question 72

Multiple Choice

What would happen, all else equal, in the market for loanable funds if the government were to decrease the tax rate on interest income?

• A)There would be an increase in the equilibrium quantity of loanable funds.
• B)There would be a reduction in the equilibrium quantity of loanable funds.
• C)There would be no change in the equilibrium quantity of loanable funds.
• D)The change in loanable funds is uncertain.

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Definitions:

Epinephrine

A hormone and neurotransmitter, also known as adrenaline, that increases heart rate, constricts blood vessels, and dilates air passages in response to stress.

Glucagon Release

The process in which glucagon, a hormone that raises blood glucose levels, is secreted by the alpha cells of the pancreas in response to low blood sugar.

Pancreas

An organ in the digestive system and endocrine system, responsible for secreting digestive enzymes and insulin.

Acinar Cells

Cells in the pancreas that produce digestive enzymes, which are secreted into the small intestine to aid in the digestion of food.