Which Statement Best Predicts the Effects of an Increase in the Supply

question 39

Multiple Choice

Which statement best predicts the effects of an increase in the supply of loanable funds?

• A) The interest rate and the real exchange rate both increase.
• B) The interest rate and the real exchange rate both decrease.
• C) The interest rate increases, and the real exchange rate decreases.
• D) The interest rate decreases, and the real exchange rate increases.

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Definitions:

Belief in a Just World

The cognitive bias that assumes people get what they deserve, leading to a rationale for misfortune and suffering.

Empathy-Altruism Model

The idea that the reason people help others depends on how much they empathize with them. When empathy is low, people help others when benefits outweigh costs; when empathy is high, people help others even at costs to themselves.

Empathy Gap

The difficulty in understanding or predicting the preferences, behaviors, or feelings of those who are in a different emotional or physical state.

Perspective Taking

The cognitive process of considering another person's viewpoint or understanding the world from their perspective.