The Quantity of Loanable Funds Supplied Increases If the Real

question 62

Multiple Choice

The quantity of loanable funds supplied increases if the real interest rate rises, all other things remaining the same, because the

• A) real interest rate is the opportunity cost of saving.
• B) real interest rate is the opportunity cost of consumption.
• C) cost of living is determined by the real interest rate.
• D) real interest rate is inversely related to the cost of buying on credit.
• E) demand for investment increases when the real interest rate rises.