31. Choose the correct statement.

A) Demand and supply in the loanable funds market determine the long-term real interest rate.

B) The long-term real interest rate influences expenditure decisions.

C) In the short run, the supply of loanable funds is influenced by the supply of bank loans.

D) A fall in the overnight loans rate that increases the supply of bank loans increases the supply of loanable funds and lowers the equilibrium real interest rate.

E) All of the above are correct.

32. Which of the following does not occur as a result of the Bank of Canada lowering the overnight loans rate?

A) The supply of loanable funds increases.

B) The long-term real interest rate falls.

C) Exports increase.

D) The inflation rate decreases.

E) Imports decrease.