If the Real Interest Rate Were Above the Equilibrium Rate

question 113

True/False

If the real interest rate were above the equilibrium rate, there would be a shortage of loanable funds.

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Definitions:

Savings Account

A deposit account held at a bank or financial institution that pays interest but typically has limited withdrawal options.

Annual Interest

The amount of interest due per year as a percentage of the amount lent, deposited, or borrowed.

Economic Profit

The difference between total revenue and total costs, including both explicit and implicit costs.

Explicit Costs

Direct, out-of-pocket payments for goods or services necessary for conducting business.