Other things the same, if the interest rate falls, then a. firms will want to borrow more, which increases the quantity of loana
ble funds demanded.
1 answer:
Answer: (a).
Annexure: <u>Since a part of the information was found missing in the question, a similar question has been provided as an attachment for reference. </u>
If the interest rate falls with other things remaining constant, a firm would like to raise more money via debt instruments.
This will lead to an increase in the quantity of loanable funds demanded.
This would further lead to increase in the level of invested funds by the public as it would get cheaper for the corporates to avail loans.
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Answer:
For Bagels = 1.33
For Donuts = -1.33
Explanation:
Using the midpoint method, Alex's percentage change in income is given by the difference in income divided by the average income:
Alex's percentage change in demand for both bagels and donuts is given by the difference in the quantity consumed divided by the average consumption:
Alex's income elasticity of demand for bagels and donuts, respectively, is:
His income elasticity of demand for bagels is 1.33, while for Donuts it is -1.33.