If the Real Interest Rate Increases from 3 Percent to 5

question 82

Multiple Choice

If the real interest rate increases from 3 percent to 5 percent

• A) the nominal interest rate will also increase.
• B) the demand for loanable funds curve will shift rightward.
• C) there will be a movement up along the demand for loanable funds curve.
• D) the supply of loanable funds curve will shift rightward.

---

Definitions:

Entire Income

The total amount of income received from all sources before any deductions, taxes or expenses are subtracted.

Units

A standard or basic quantity into which an item of supply is divided, issued, or used.

Clothing

Garments and articles worn on the body, typically made from fabric or textiles.

Budget Constraint

The limitation on the consumption bundles that a consumer can afford given their income and the prices of goods and services.