A Country Initially Has an Equilibrium Real Interest Rate of 4

question 12

Multiple Choice

A country initially has an equilibrium real interest rate of 4 per cent and an equilibrium quantity of investment of $2 trillion. The government's budget deficit then increases. According to the crowding-out effect, the

• A) demand for loanable funds curve shifts rightward, the real interest rate rises and investment decreases.
• B) demand for loanable funds curve shifts rightward, the real interest rate falls and investment increases.
• C) demand for loanable funds curve shifts leftward, the real interest rate falls and investment increases.
• D) supply of loanable funds curve shifts rightward, the real interest rate rises and investment increases.
• E) supply of loanable funds curve shifts leftward, the real interest rate falls and investment decreases.

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Definitions:

Intracellular Matrix

This is not a real key term. Intracellular components are usually referred to as cytoplasm or intracellular fluid; the term "extracellular matrix" refers to the substance surrounding cells. NO.

Tissue

Groups of similar cells and their extracellular matrix that work together to perform specific functions within organisms.

Neurons

The basic working units of the brain, specialized cells that transmit information to other nerve cells, muscle, or gland cells.

Nervous Tissue

Specialized tissue that forms the nervous system, consisting of neurons and supporting cells, critical for transmitting impulses throughout the body.