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Microeconomics

13th Edition
Roger A. Arnold
ISBN: 9781337617406

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BuyFindarrow_forward

Microeconomics

13th Edition
Roger A. Arnold
ISBN: 9781337617406
Textbook Problem

How would the interest rate change as a result of the following?

  1. a. A rise in the demand for consumption loans
  2. b. A decline in the supply of loanable funds
  3. c. A rise in the demand for investment loans

(a)

To determine

Identify the changes in interest rate when the demand for consumption loans increases.  

Explanation

The demand for consumption loan is a part of demand for loanable funds. The interest rate is the price of loanable funds that the consumers are ready and able to pay for the early availability of goods and services...

(b)

To determine

Identify the changes in interest rate when the supply of loanable funds decreases.  

(c)

To determine

Identify the changes in interest rate when the demand for investment loans rise.   

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