The Real Interest Rate Is ________ Related to the Supply

question 58

Multiple Choice

The real interest rate is ________ related to the supply of loanable funds because ________.

• A) positively; the opportunity cost of consumption expenditure increases as the real interest rate rises
• B) positively; people are motivated to increase their consumption expenditure as the real interest rate rises
• C) negatively; the opportunity cost of consumption expenditure increases as the real interest rate rises
• D) negatively; people are motivated to save more as the real interest rate rises
• E) None of the above answers is correct.

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