The Current Nominal Interest Rate Is 9 Percent

question 172

Multiple Choice

The current nominal interest rate is 9 percent. If the expected inflation rate changes from 2 to 3 percent (ceteris paribus) , it follows that the demand for loanable funds will

• A)rise by more than the supply of loanable funds will rise.
• B)will rise by less than the supply of loanable funds will fall.
• C)will fall by more than the supply of loanable funds will rise.
• D)rise by the same amount that the supply of loanable funds will rise.
• E)none of the above

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An economic policy that allows imports and exports between countries without tariffs, quotas, or other restrictions.

Opportunity Cost

The denial of potential enhancements from other possibilities once one choice is made.

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Short advertisements broadcasted on television, designed to inform or persuade viewers about products, services, or ideas.

Opportunity Costs

The cost of forgoing the next best alternative when making a decision or choosing to do one thing over another.