What Does a Lower Real Interest Rate Decrease the Quantity

question 5

Multiple Choice

What does a lower real interest rate decrease the quantity of?

• A) loanable funds demanded
• B) loanable funds supplied
• C) domestic investment
• D) net capital outflow

---

Definitions:

Conditioned Response

A conditioned response is a learned reaction or response to a previously neutral stimulus that has become significant through association.

Unconditioned Response

An automatic, natural response to a stimulus that does not require previous conditioning or learning.

Trial-And-Error

A problem-solving method involving repeated, varied attempts which are continued until success, or until the agent stops trying.

Negative Reinforcement

A behavioral principle where the removal of an unpleasant stimulus following a particular behavior increases the likelihood of that behavior being repeated.