which of the following best describes why the demand for loanable funds is downward sloping? choose 1…

which of the following best describes why the demand for loanable funds is downward sloping? choose 1 answer: a higher interest rates discourage savings b at higher interest rates returns to investment will be higher c higher interest rates discourage spending and encourage savings d at higher interest rates, the return to investments will be lower e households prefer to keep some assets in a liquid form so that they can buy things

which of the following best describes why the demand for loanable funds is downward sloping? choose 1 answer: a higher interest rates discourage savings b at higher interest rates returns to investment will be higher c higher interest rates discourage spending and encourage savings d at higher interest rates, the return to investments will be lower e households prefer to keep some assets in a liquid form so that they can buy things

Answer

Brief Explanations:

The demand for loanable funds is downward - sloping because higher interest rates make borrowing more expensive. This discourages spending and encourages saving. Higher interest rates also mean that the cost of borrowing for investment is higher, reducing the quantity of loanable funds demanded. Option C correctly describes this relationship.

Answer:

C. Higher interest rates discourage spending and encourage savings