1. If economic expansion is expected, then demand for loanable funds should ____ and interest rates should ____.
a. increase; increase
b. increase; decrease
c. decrease; decrease
d. decrease; increase
2. If the Treasury uses a relatively large proportion of ____ debt to finance the deficit, this may place upward pressure on ____ interest rates, and corporations may reduce their investment in fixed assets.
a. long-term; long-term
b. long-term; short-term
c. short-term; long-term
d. B and C