A Decrease in the Real Interest Rate Does Which of the Following

question 47

Multiple Choice

A decrease in the real interest rate does which of the following?

• A)increases the demand for loanable funds
• B)decreases saving
• C)increases consumption spending
• D)decreases the demand for loanable funds

---

Definitions:

False Cause

A logical fallacy where a cause is incorrectly identified for an event or phenomenon, leading to incorrect conclusions.

Gambler's Fallacy

The erroneous belief that if a particular event occurs more frequently than normal during a past period, it is less likely to happen in the future (or vice versa).

Utilitarian

A philosophy or ethical theory that advocates for actions that maximize happiness and well-being for the majority.

Net Welfare

The overall well-being and economic status of a group, considering both positive gains and negative costs.