Question

Interest rates fall when

		the central bank conducts contractionary monetary policy
		an increase in savings increases the supply of loanable funds in the economy
		a new technology leads people to borrow more in order to invest in the new technology
		the central bank sells Treasury bills

Answer 1

When the central bank connducts contractor ary minecraft policy then they with draw money from the economy. This will reduce the surplus fund from the investors gente reduce the supply of loanable fund. This will increase the interest rate.

An increase in supply of loanable fund will shift the supply curve to its right gente the interest rate will fall.

Due to advance men in technology the borrowing has increased. Thus, the demand for fund will increase and shift to right this will increase the interest rate.

When central bank sells T-Bills then it withdraws money from the economy hence reduction in supply of loanable fund. The interest rate will increase.

Second option is correct.

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