Suppose Business Decision Makers Become More Optimistic About Future Economic

question 193

Multiple Choice

Suppose business decision makers become more optimistic about future economic conditions and desire additional funds to expand their plant capacity. What is the likely effect on the loanable funds market?

• A) The demand for loanable funds will increase, and the interest rate will rise.
• B) The demand for loanable funds will decrease, and the interest rate will fall.
• C) The supply for loanable funds will increase, and the interest rate will fall.
• D) The supply for loanable funds will decrease, and the interest rate will rise.

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A form of democracy in which people decide on policy initiatives directly, contrasting with representative democracy.

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