Figure 18-4

question 117

Multiple Choice

Figure 18-4.On the horizontal axis of the graph,L represents the quantity of loanable funds in billions of dollars.
-Refer to Figure 18-4.If the equilibrium quantity of loanable funds is $50 billion and if the equilibrium nominal interest rate is 8 percent,then

• A) there is an excess supply of loanable funds at a real interest rate of 6 percent.
• B) there is an excess demand for loanable funds at a real interest rate of 8 percent.
• C) the rate of inflation is approximately 2 percent.
• D) the rate of inflation is approximately 14 percent.

---

Definitions:

Fatty Substance

Materials composed of lipids, which can be found in various forms throughout the body, playing critical roles in energy storage, insulation, and cell structure.

Axons

Long, slender projections of neurons that transmit electrical impulses away from the neuron's cell body to other neurons, muscles, or glands.

Neural Impulse

An electrical signal that travels along a neuron, facilitating communication between the brain and other parts of the body.

Myelin Sheath

A protective covering made of fatty substances and proteins that surrounds the axons of many neurons, enhancing the speed of nerve impulse transmission.