If the Real Interest Rate Rises

question 143

Multiple Choice

If the real interest rate rises,

• A)the quantity of loanable funds demanded increases.
• B)the quantity of loanable funds demanded decreases.
• C)the demand for loanable funds curve shifts leftward.
• D)the demand for loanable funds curve shifts rightward.
• E)there is is movement down along the demand for loanable funds curve.

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Definitions:

Cost of Living

The financial requirement to maintain a specific lifestyle, covering essential costs like accommodation, nutrition, taxes, and medical care.

Adjustment Agreement

A contract or understanding that allows for modifications to be made to the terms of an agreement or deal, adapting to new conditions or information.

COLA

Cost of Living Adjustment, an increase in income to keep up with living expenses, often applied to salaries and benefits to offset inflation.

Misery Index

An economic indicator created by summing the unemployment rate and the inflation rate, intended to measure the average citizen's financial hardship.