If the Real Interest Rate Is Above the Equilibrium Real

question 168

Multiple Choice

If the real interest rate is above the equilibrium real interest rate,

• A) borrowers will be unable to borrow all of the funds they want to borrow and the demand for loanable funds curve will shift leftward.
• B) a surplus of loanable funds will cause the real interest rate to fall.
• C) lenders will be unable to find borrowers willing to borrow all of the available funds and the real interest rate will rise.
• D) borrowers will be unable to borrow all of the funds they want to borrow and the demand for loanable funds curve will shift rightward.

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Definitions:

Wage Bill

The total amount of money paid by businesses to their employees for work performed, typically over a specific period.

Remittance

The transfer of money by foreign workers to individuals in their home country.

Immigration

The process by which individuals move from one country to another with the intention of settling there.

Home Country

Refers to the country where a company's headquarters are located and from which it operates most directly.