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"When There Is a Shortage of Loanable Funds, the Real

question 148

Essay

"When there is a shortage of loanable funds, the real interest rate will increase." Explain whether the previous statement is correct or not.


Definitions:

Technological Forecasts

Long-term forecasts concerned with the rates of technological progress.

Business Cycle

The natural rise and fall of economic growth that occurs over time, including periods of prosperity, recession, depression, and recovery.

Inflation Rates

The rate at which the general level of prices for goods and services is rising, eroding purchasing power.

Money Supplies

The total amount of monetary assets available in an economy at a specific time, including cash, coins, and balances held in bank accounts.

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