The Current Nominal Interest Rate Is 9 Percent

question 172

Multiple Choice

The current nominal interest rate is 9 percent. If the expected inflation rate changes from 2 to 3 percent (ceteris paribus) , it follows that the demand for loanable funds will

• A)rise by more than the supply of loanable funds will rise.
• B)will rise by less than the supply of loanable funds will fall.
• C)will fall by more than the supply of loanable funds will rise.
• D)rise by the same amount that the supply of loanable funds will rise.
• E)none of the above

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Definitions:

Cartilage

A flexible, rubbery connective tissue found in various parts of the body, such as the joints, ear, and nose, providing support and structure.

Macrophage

A type of white blood cell that engulfs and digests cellular debris, foreign substances, microbes, and cancer cells.

Phagocytizes

The process by which cells engulf and digest solid particles, typically used by immune system cells to eliminate pathogens and debris.

Infections

The entry and proliferation of microorganisms like bacteria, viruses, and parasites, which are usually absent from the body, frequently leading to sickness.