For an Imaginary Economy,when the Real Interest Rate Is 7

question 119

Multiple Choice

For an imaginary economy,when the real interest rate is 7 percent,the quantity of loanable funds demanded is $500 and the quantity of loanable funds supplied is $500.Currently,the nominal interest rate is 9 percent and the inflation rate is 4 percent.Currently,

• A)the market for loanable funds is in equilibrium.
• B)the quantity of loanable funds supplied exceeds the quantity of loanable funds demanded,and as a result the real interest rate will rise.
• C)the quantity of loanable funds supplied exceeds the quantity of loanable funds demanded,and as a result the real interest rate will fall.
• D)the quantity of loanable funds demanded exceeds the quantity of loanable funds supplied,and as a result the real interest rate will rise.

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Definitions:

Posterior Antebrachial

Refers to the back side of the forearm.

Extensor Carpi Ulnaris

A muscle of the forearm that extends and adducts the wrist, located on the ulnar side.

Pronator Teres

A muscle in the forearm that helps in pronating the wrist by turning the palm downward.

Masseter

A facial muscle that plays a major role in the chewing of solid foods, connecting the jawbone to the cheekbone.