How will a decrease in time preferences affect the loanable funds market?   A.   There will be an increase in the supply of loanable funds.   B.   There will be a decrease in the supply of loanable funds.   C.   There will be an increase in the demand of loanable funds.   D.   There will be a decrease in the demand of loanable funds.

Principles of Accounting Volume 2
19th Edition
ISBN:9781947172609
Author:OpenStax
Publisher:OpenStax
Chapter11: Capital Budgeting Decisions
Section: Chapter Questions
Problem 16MC: When using the NPV method for a particular investment decision, if the present value of all cash...
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How will a decrease in time preferences affect the loanable funds market?

 

A.

 

There will be an increase in the supply of loanable funds.

 

B.

 

There will be a decrease in the supply of loanable funds.

 

C.

 

There will be an increase in the demand of loanable funds.

 

D.

 

There will be a decrease in the demand of loanable funds.

Expert Solution
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Decrease in time preferences tells us that individuals in the economy are more patient and more inclined to save for future.

 

 

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