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:

Selfish Impulses

Inclinations or urges to act in a way that prioritizes one's own interests over the welfare of others.

Emotional Stability

A personality trait indicative of how much a person's emotions fluctuate and how easily they can emotionally recover from stress or negative situations.

Extraversion/Introversion

Personality traits that describe how outgoing and social or how reserved and solitary an individual is.

Openness to Experience

A personality trait that describes the degree to which a person is open to new experiences, curious, imaginative, and willing to explore novel ideas.