Use the Table Below to Answer the Following Questions

question 119

Multiple Choice

Use the table below to answer the following questions.
Table 23.2.3
The table shows an economy's demand for loanable funds schedule and supply of loanable funds schedule.

-Consider Table 23.2.3. If planned investment decreases by $1.0 trillion at each real interest rate, what is the new equilibrium real interest rate?

• A)2 percent a year
• B)5 percent a year
• C)2.5 percent a year
• D)3.5 percent a year
• E)There is no new equilibrium real interest rate.

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Definitions:

Mutual Adjustments

Describes the process by which parties in a negotiation modify their positions and approaches in response to the other party's actions.

Contrast Error

a bias in evaluating others' performance by overly emphasizing differences between the individual's performance and the group norm, rather than assessing the performance on its own merits.

Absolute Standard

A fixed criterion of measure that remains unchanged over time and under different conditions.

Perception Error

A mistake in interpreting or understanding information received from the environment due to biases, incorrect information, or misinterpretation.