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:

Ambidextrous Organization

An organization that is capable of simultaneously exploiting its current capabilities while exploring new opportunities, thereby balancing efficiency and innovation.

Strategic Control

A management process used to track the strategy as it is being implemented, detecting any problem areas or potential improvements.

Virtual Organization

Describes a network of independent organizations, resources, or individuals that function and appear as a single entity through the use of digital technologies.

Holacracy

A method of decentralized management and organizational governance, where decision-making is distributed to self-organizing teams rather than being centralized in a traditional management hierarchy.