Which Combination of Events Could Have Caused the Equilibrium Interest

question 17

Multiple Choice

Which combination of events could have caused the equilibrium interest rate to fall and the equilibrium quantity of loanable funds (both borrowed and loaned) to fall?

• A) Firms are more pessimistic, and governments run fewer deficits.
• B) A baby boom begins, and investor confidence rises.
• C) People have lower time preferences, and governments run larger deficits.
• D) People have lower time preferences, and capital is more productive.
• E) A baby boom begins, and people have higher time preferences.

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Definitions:

Research Methods

Systematic approaches, techniques, and procedures used by scientists to conduct research, gather data, and analyze results in order to draw valid conclusions.

Dual-Process Theories

Psychological models that propose two distinct systems for processing information: one that is fast, automatic, and unconscious, and another that is slower, deliberate, and conscious.

Important Decisions

Choices or judgments that have significant effects on an individual's life or situation.

Rule-Governed Strategies

Approaches based on systematic and logical procedures, such as algorithms or heuristics, for problem-solving or decision-making.