Suppose the Current Real Interest Rate Is 4 Per Cent

question 121

Multiple Choice

Suppose the current real interest rate is 4 per cent and the equilibrium real interest rate is 3 per cent. Then

• A)prices rise and inflation occurs.
• B)there is a surplus of loanable funds.
• C)there is neither a shortage nor surplus of loanable funds.
• D)there is a shortage of loanable funds.

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Definitions:

Promissory Estoppel

A legal principle that prevents a party from retracting a promise which the other party has reasonably relied upon to their detriment.

Oral Contracts

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UCC

The Uniform Commercial Code is an extensive collection of statutes that regulate every aspect of commercial dealings across the United States.

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