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1. Explain whether the following statement is true, false, or uncertain. Be explicit about your assumptions. Support your answer by a graph. If a person is a lender and the interest rate rises, he or she will remain a

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Answer #1

Ans. True - This is because increase in interest rates would mean higher return on the money lent by the lender and even if demand for borrowings decreases due to higher interest rates , then also lender would remain a lender in the greed of higher returns if people borrow from him or her. This can simply be shown using Demand and Supply Curve , where if interest rate on Y axis increases , Quantity Supplied would increase and Quantity Demanded would decrease then before.

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