If the Real Interest Rate Is Above the Equilibrium Real

question 129

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 real interest rate will rise.
• B) borrowers will be unable to borrow all of the funds they want to borrow and the real interest rate will 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) lenders will be unable to find borrowers willing to borrow all of the available funds and the real interest rate will fall.

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Definitions:

Reward Allocation Norm

The set of principles or guidelines that govern how rewards, such as bonuses or recognition, are distributed among members of a group or an organization.

Reciprocity

A social norm of responding to a positive action with another positive action, rewarding kind actions as a way of ensuring mutual benefit or cooperation.

Status Hierarchy

An organizational or social system in which individuals or groups are ranked one above the other according to status or authority, influencing interactions and distribution of resources.

Status And Communication

The relationship between an individual's or group's social or professional standing and the manner or effectiveness of their interactions and information exchange.