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During two recent U.S. recessions, we can see that investment fell substantially. Naturally, a recession could generate pessimism about the future economy, causing investor confidence (and, therefore, the demand for loanable funds) to fall. But a fall in supply of loanable funds could also lower equilibrium investment. Which of the following provides the strongest evidence that a fall in the demand for, and not the supply of, loanable funds is an important reason for decreased investment during these two recessions?

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