flow/connect htm Help Save & The interest rates on many student loans, especiall

Question

flow/connect htm Help Save & The interest rates on many student loans, especially from private lenders, vary with the fed funds rate Which of the following statements is true? Expansionary monetary policy will raise interest rates and increase the demand for education Expansionary monetary policy will lower interest rates and decrease the demand for education Contractionary monetary policy will lower interest rates and lower the demand for education. Contractionary monetary policy will raise interest rates and lower the demand for education DOLL F9 F10 F11 5 6 8

Explanation / Answer

If the rate of interest is increased the amount of funds borrowed for education would fall. This implies that when the interest rate in the economy falls, the interest rate on student loans falls as well and so the demand is increased. Now this implies Monetary contraction will increase the interest rate which increases interest rates on educational loans and this reduces the demand for loans,

Option D (Last option) is correct

Related Questions

Navigate

• Browse (All)
• Browse F
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.