A businessman had planned to take out a loan of $5000 at an interest rate of 8% per year. After the interest rate increased to 10% he decided to borrow only $4000. In what range does his interest elasticity of demand for loans fall?
- A0.0 to –0.3
- B–0.4 to –0.7
- C–0.8 to –1.2
- D–1.3 to –1.7