1. If economic condition is expected to worsen, the demand for loanable funds should ____ and interest rates should ____. Question 1 options: increase; increase increase; decrease decrease; decrease decrease; increase
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This would lead to a decrease in demand for loanable funds. On the other hand, if the demand for loanable funds decreases, lenders may lower interest rates to entice borrowers to take out loans. This would lead to a decrease in interest rates. Show more…
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