Question

a rise in demand for loanable funds by a large country can result fall in interest rates Ono change in interest rates O an increase in the interest rate Onone of the answers are correct

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Answer 1

Answers

1. an increase in interest rate.

if interest not increased , money supply will increases, which might be result inflation and effect the economy

2.false.

if wealth increases demand for loan decrease then loanable fund supply curve move backward.(left)

3. you are exhibiting adaptive expectations.

Adapative expectations means forecast is based on past events and trends .Here decision is made solely based on past experience or past trends.

4. Lowers the equilibrium rate of interest

There is inverse relationship between bond price and interest rate. if market interest is reduced bond price will go up because bond holder gettting higher interest than those of market rate.