The Equilibrium Interest Rate

question 9

Multiple Choice

The equilibrium interest rate

• A) equates the aggregate demand for funds with the aggregate supply of loanable funds.
• B) equates the elasticity of the aggregate demand and supply for loanable funds.
• C) decreases as the aggregate supply of loanable funds decreases.
• D) increases as the aggregate demand for loanable funds decreases.

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Definitions:

Selective Comprehension

The process by which consumers interpret information in a way that aligns with their existing beliefs and attitudes, often leading to distorted perceptions.

Selective Exposure

The process by which individuals preferentially seek out and pay attention to information that conforms to their existing beliefs and values, while avoiding contradictory information.

Subliminal Perception

The processing of information by the brain below the level of conscious awareness.

Selective Comprehension

The process by which individuals interpret information based on their existing beliefs, attitudes, or desires, often leading to misunderstanding or distortion of messages.