The Equilibrium Interest Rate Should

question 10

Multiple Choice

The equilibrium interest rate should

• A) fall when the aggregate supply of funds exceeds the aggregate demand for funds.
• B) rise when the aggregate supply of funds exceeds the aggregate demand for funds.
• C) fall when the aggregate demand for funds exceeds the aggregate supply of funds.
• D) rise when the aggregate demand for funds equals the aggregate supply of funds.
• E) B and C

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Definitions:

Consistent Principle

A concept or rule that remains uniform and unchanged across different contexts or situations, ensuring coherence and reliability in application.

Essential Attributes

Essential attributes refer to the fundamental or inherent qualities that define the nature of something.

Consistent Principle

A rule or standard that remains uniform and unchanged over time, ensuring reliability and predictability in reasoning or behavior.

Jointly Exhaustive

A characteristic of a set of categories or propositions that together cover all possible scenarios or outcomes, leaving no options unaccounted for.