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Michael needs to borrow money to buy a home. Suppose that the saving rate in the country is expected to decrease Assuming nothing else changes,
Michael needs to borrow money to buy a home. Suppose that the saving rate in the country is expected to decrease Assuming nothing else changes, this means that if Michael borrows now, his cost of borrowing money is expected to due to the following factor: Increasing preferences for future consumption Increasing preferences for current consumption Falling interest rates which of the folowing events could increase the cost of moneyr X The federal deficit increases The Federal Reserve purchases Treasury securities held by banks The Federal Reserve sells Treasury securities to banks The federal deficit decreases
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