If savers decide to save more, ceteris paribus, the loanable funds theory predicts: | Faculties

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📊 Financial Markets and Institutions

Q. If savers decide to save more, ceteris paribus, the loanable funds theory predicts:

(A) A reduction in investment and interest rates
(B) An increase in investment and interest rates
(C) Higher economic growth
(D) A reduction in interest rates and more investment

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✅ Correct Answer: (D) A reduction in interest rates and more investment

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