Consider the market for loanable funds. If firms’ expectations
about the economy improve and the government reduces taxes on
investment income, the real interest rate will ______ and the
quantity of loanable funds will _______
Either increase, decrease, or stay the same; increase
Decrease; either increase, decrease, or stay the same
Stay the same; stay the same
Either increase, decrease, or stay the same; decrease
Increase; either increase, decrease, or stay the same