When the Actual Real Interest Rate Is Less Than the Equilibrium

question 227

Multiple Choice

When the actual real interest rate is less than the equilibrium real interest rate

• A) the equilibrium real interest rate will rise.
• B) borrowers find it difficult to borrow.
• C) there is a shortage of loanable funds.
• D) Both answers B and C are correct.

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Definitions:

Iconic Memory

A fast-decaying store of visual information; a component of the sensory memory that briefly holds images.

Echoic Memory

A type of sensory memory that holds auditory information for a few seconds after the sound is made.

Consolidation

The process by which memories become stable in the brain, transforming from a short-term to a long-term state.

Neural Functioning

The operation and activities of neurons, including the transmission of electrical and chemical signals within the brain and throughout the nervous system.