Which Combination of Events Could Have Caused the Equilibrium Interest

question 77

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 lent) to rise?

• 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) More individuals are middle-aged,and wealth increases.

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Definitions:

Metric System

A system of measurements that uses the base function of 10.

Base Ten

A numeral system that is decimal and uses ten as its base for counting and calculations.

Teaspoon

A small spoon used typically for measuring or stirring liquids, equivalent to about 5 milliliters in volume.