If There Is a Shortage of Loanable Funds,then

question 73

Multiple Choice

If there is a shortage of loanable funds,then

• A)the quantity demanded is greater than the quantity supplied and the interest rate will rise.
• B)the quantity demanded is greater than the quantity supplied and the interest rate will fall.
• C)the quantity supplied is greater than the quantity demanded and the interest rate will rise.
• D)the quantity supplied is greater than the quantity demanded and the interest rate will fall.

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Definitions:

Physical Commodity

Tangible goods such as metals, oil, grain, which are traded on commodity markets and can be physically delivered.

Government Backing

Support or endorsement from a government body, often through policies, subsidies, or direct financial aid.

Gold Standard

A currency where the value is determined by the ability to trade it for a specified amount of gold (i.e., $1 for 1/35 of an ounce) at a government-approved bank.

Currency Value

The worth of a currency in terms of the amount of goods or services that one unit of the currency can purchase.