If a recession were to reduce the demand for loans, ceteris ...

[Lisaclaire]

If a recession were to reduce the demand for loans, ceteris paribus,
 
  A) the interest rate will increase.
  B) the interest rate will not change.
  C) the interest rate will decrease.
  D) the number of loans will increase.

Question 2

As the baby boomer generation retires and takes money out of their retirement accounts, what is expected to happen to the interest rate, ceteris paribus?
 
  A) It will increase.
  B) It will not change.
  C) It will decrease.
  D) It will decrease because of demand-side shocks.

[whitcassie]

Answer to Question 1

C

Answer to Question 2

A