In the classical model, an increase in saving is assumed to increase
In the classical model, an increase in saving is assumed to increase
a. the demand for loanable funds, which decreases interest rates.
b. the supply of loanable funds, which decreases interest rates.
c. both the demand for money and loanable funds, which reduces interest rates.
d. neither the demand for money nor bonds, leaving interest rates unchanged.
ANSWER
B
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