If Households Experienced Greater Uncertainty About Their Economic Future,which of the Following

question 155

Multiple Choice

If households experienced greater uncertainty about their economic future,which of the following would occur in the market for loanable funds?

• A) Both the supply and demand for funds would increase,lowering the interest rate and raising investment spending.
• B) The supply of funds would decrease,raising the interest rate and lowering investment spending.
• C) The supply of funds would decrease,lowering both the interest rate and investment spending.
• D) The supply of funds would increase,lowering both the interest rate and investment spending.
• E) The supply of funds would increase,lowering the interest rate and raising investment spending.

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Definitions:

Venture Capitalist

A venture capitalist is an investor who provides capital to startup companies or supports small enterprises with potential for growth in exchange for equity stakes.

Crowded Market

describes a market characterized by high levels of competition, with many firms offering similar products or services, often leading to increased competition on price and quality.

In-House

Activities or processes performed within an organization by its own employees or resources, rather than being outsourced.

Outsource

The practice of hiring third-party vendors to perform services or produce goods that were previously done in-house, often to reduce costs or access specialized skills.