Question

Suppose investors believe the economy will grow in the future. Which of the following best describes the impact of this belief on demand for loanable funds and interest rates?

Loanable Funds / Interest rates
A. Increase / Increase
B. Increase / Decrease
C. No change / Increase
D. Decrease / Increase
E. Decrease / Decrease

Answer 1

Increase Increase

Step-by-step explanation:

Answer 2

B increase in loanable funds and decrease in interest rates