If the Real Interest Rate Is Below the Equilibrium Real

question 59

Multiple Choice

If the real interest rate is below the equilibrium real interest rate,

• A)lenders will be unable to find borrowers willing to borrow all of the available funds and the supply of loanable funds curve shifts leftward.
• B)borrowers will be unable to borrow all of the funds they want to borrow and the demand for loanable funds curve shifts rightward.
• C)a shortage of of loanable funds exists, and the real interest rate rises.
• D)borrowers will be unable to borrow all of the funds they want to borrow and the demand for loanable funds curve shifts leftward.
• E)lenders will be unable to find borrowers willing to borrow all of the available funds and the supply of loanable funds curve shifts rightward.

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Definitions:

Checks and Balances

A system in democratic governments designed to prevent any one branch from gaining excessive power by providing each branch with the authority to check the actions of the others.

Judicial Branch

The branch of government responsible for interpreting the law and administering justice through courts and other judicial institutions.

Constitutional

Related to, governed by, or in accordance with a constitution, which is the fundamental principles or established precedents guiding a state or organization.

Constitutions

Legal documents or sets of principles that outline the fundamental laws governing a country or other organization, specifying how the entity is to be governed and defining the rights of its citizens or members.