If the Demand for Loanable Funds Shifts Right, Then the Real

question 12

Multiple Choice

If the demand for loanable funds shifts right, then the real interest rate

• A)and the equilibrium quantity of loanable funds both fall.
• B)falls and the equilibrium quantity of loanable funds rises.
• C)and the equilibrium quantity of loanable funds both rise.
• D)rises and the equilibrium quantify of loanable funds falls.

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Definitions:

Consumption

The use of goods and services by households or individuals, often considered in terms of the total amount consumed in an economy.

Allocation of Resources

The process of distributing available resources among various uses to satisfy the needs and wants of the society.

Taxes

Financial charges imposed by a government on individuals, businesses, or other entities to fund public spending and various services.

Prices

The monetary value assigned to goods and services in a market, determining the exchange rate in transactions.