Figure 18-4

question 231

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 $56 billion and if the rate of inflation is 5 percent,then the equilibrium nominal interest rate is

• A) lower than 6 percent..
• B) approximately 6 percent.
• C) between 6 percent and 8 percent.
• D) approximately 12 percent.