Asked by
Carlos Munoz
on Nov 26, 2024
Verified
A lower equilibrium interest rate
A) increases saving, reduces total spending, and increases total output.
B) decreases saving, increases total spending, and decreases total output.
C) increases investment, increases total spending, and increases total output.
D) decreases investment, decreases total spending, and increases total output.
Equilibrium Interest Rate
The interest rate at which the demand for loanable funds equals the supply of loanable funds, balancing savings and investment in the economy.
Total Spending
The sum of all expenditures made by consumers, businesses, and the government within an economy over a specific period.
- Analyze how variations in interest rates influence savings, investments, and expenses associated with loans.
- Understand the role of interest rates in the equilibrium of financial markets.
Verified Answer
CC
Learning Objectives
- Analyze how variations in interest rates influence savings, investments, and expenses associated with loans.
- Understand the role of interest rates in the equilibrium of financial markets.