Suppose That There Is an Increase in Disposable Income and Simultaneously

question 136

Multiple Choice

Suppose that there is an increase in disposable income and simultaneously an increase in the expected profitability of investment.As a result,the equilibrium real interest rate ________ and the equilibrium quantity of loanable funds ________.

• A)remains unchanged;increases
• B)falls;increases
• C)rises;increases
• D)might rise,fall or remain unchanged;increases
• E)might rise,fall or remain unchanged;decreases

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Definitions:

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