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In the Loanable Funds Market, If the Real Interest Rate

question 205

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In the loanable funds market, if the real interest rate is higher than the equilibrium real interest rate,


Definitions:

Elasticity

A measure of how much the quantity demanded or supplied of a good changes in response to a change in price.

Quantity Demanded

The total amount of a good or service that consumers are willing and able to purchase at a given price.

Change in Price

The variation in the price level of goods or services over a period of time.

Elastic

Describes a situation in economics where the demand or supply for a good or service significantly changes in response to changes in price.

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