What Would Happen in the Market for Loanable Funds If

question 93

Multiple Choice

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

• A) the supply of loanable funds would shift right and investment would increase.
• B) the supply of loanable funds would shift left and investment would decrease.
• C) the demand for loanable funds would shift right and investment would increase.
• D) the demand for loanable funds would shift left and investment would decrease.

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Definitions:

Bailment Relationship

A legal relationship in which physical possession of personal property is transferred from one party to another for a specific purpose, while ownership remains with the original party.

Negligent

Failure to take proper care in doing something, leading to damage or injury to others.

Lawful Action

Actions or behaviors that are in accordance with legal requirements and legislations.