A businessman had intended to borrow $5000 at 8 % per year for house purchase. When the interest rate rose to 10 % he decided to borrow only $4000.
Within what range is his interest elasticity of demand for loans?
1 )
0.0 to –0.3
2 )
–0.4 to –0.7
–0.8 to –1.2
4 )
–1.3 to –1.7
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