If the Real Interest Rate Rises from 3 Percent to 5

question 49

Multiple Choice

If the real interest rate rises from 3 percent to 5 percent,

• A)the nominal interest rate falls.
• B)the demand for loanable funds curve shifts rightward.
• C)there is a movement up along the demand for loanable funds curve.
• D)the supply of loanable funds curve shifts rightward.
• E)there is a movement down along the supply of loanable funds curve.

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Definitions:

Compare

To examine two or more objects, ideas, or entities to identify similarities and differences between them.

Contrast Effects

The enhancement or reduction in perception and judgement of stimuli when compared to a recently encountered contrasting stimulus.

Absolute Thresholds

The minimum intensity of a stimulus that one can detect 50% of the time, varying between individuals and conditions.

Sensory Adaptation

How sensory receptors gradually become less perceptive to continuous stimuli as time passes.