The Substantial Decline in Interest Rates During the Credit Crisis

question 38

Multiple Choice

The substantial decline in interest rates during the credit crisis is attributed to which of the following changes in the market for loanable funds?

• A) an increase in both the supply of and the demand for loanable funds
• B) a decrease in both the supply of and the demand for loanable funds
• C) a decrease in the supply of loanable funds and an increase in the demand for loanable funds
• D) an increase in the supply of loanable funds and a decrease in the demand for loanable funds

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Definitions:

Standard Error

The standard deviation of the sampling distribution of a statistic, often used to calculate confidence intervals or test hypotheses.

Null Hypothesis

The default position that there is no difference or effect and that any observed differences are due to chance.

Probability

The quantification of an event's chances of occurring, given as a number from 0 to 1.