The Equilibrium Real Interest Rate Is 5 Percent

question 243

Multiple Choice

The equilibrium real interest rate is 5 percent.If the real interest rate is

• A) 3 percent, then the supply of loanable funds curve will shift leftward as new savers enter the market.
• B) 6 percent, the demand for loanable funds curve will shift rightward as firms enter the market to borrow at the lower rate.
• C) 8 percent, there is a surplus of loanable funds.
• D) 2 percent, there is a shortage of loanable funds.
• E) anything other than 5 percent, the supply of loanable funds curve and/or the demand for loanable funds curve will shift to move the real interest rate to 5 percent.

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Definitions:

Group Process

The dynamics and mechanisms by which a group interacts, makes decisions, and achieves its goals, including communication and leadership styles.

Collective Violence

Violent actions carried out by groups of individuals, often aimed at achieving a political, social, or economic objective.

Relative Deprivation

A feeling of dissatisfaction experienced by individuals who perceive themselves as worse off compared to others.

Berkowitz

Leonard Berkowitz is a social psychologist known for his research on aggression, including the development of the Cognitive Neoassociation Model of aggressive behavior.