Which of These Would Cause the Equilibrium Interest Rate to Rise

question 174

Multiple Choice

Which of these would cause the equilibrium interest rate to rise and the equilibrium quantity in the loanable funds market to fall?

• A) an increase in the average income in the population
• B) expectations of greater job security
• C) increases in the demand for the products of several firms
• D) an advance in technology

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Definitions:

Normative Statements

Assertions about how the world ought to be, involving opinions and subjective judgements.

Rational Choice

A theory assuming individuals use logical calculations to make prudent decisions that provide them with the greatest benefit or satisfaction.

Facts

Data or information based on real occurrences or truths used for analysis, decision-making, or proving arguments.

Theories

Systematic ideas or principles formulated to explain phenomena, provide understanding, and predict future occurrences.