If the Real Interest Rate Is Above the Equilibrium Real

question 93

Multiple Choice

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

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

---

Definitions:

Producer Surplus

The difference between what producers are willing to sell a good for and the actual price they receive, representing profit or gains from trade.

Tax

A mandatory financial charge or some other type of levy imposed upon a taxpayer (an individual or legal entity) by a governmental organization in order to fund government spending and various public expenditures.

Mutually-Agreeable Trade

A transaction or trade that both parties involved consent to and believe will benefit them.

Opportunity Cost

The expense incurred by not selecting the second-best option when deciding among various choices.