An Increase in the Real Interest Rate

question 147

Multiple Choice

An increase in the real interest rate

• A)has no effect on the loanable funds.
• B)increases current consumption.
• C)shifts the supply of loanable funds curve rightward.
• D)decreases the quantity of loanable funds supplied.
• E)increases the quantity of loanable funds supplied.

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Definitions:

Dalton's Law

The principle that the total pressure exerted by a mixture of gases is equal to the sum of the pressures that each would exert if it were present alone.

Partial Pressures

The pressure that a single gas in a mixture of gases would exert if it alone occupied the entire volume of the mixture.

Total Pressure

The combined pressure exerted by a mixture of gases in a container, equal to the sum of the pressures that each gas would exert if it were alone.

Gases

States of matter consisting of particles that have neither a defined volume nor shape, able to expand freely to fill any space available, such as oxygen and nitrogen.