If the Interest Rate Is Below Equilibrium, Then the Quantity

question 314

True/False

If the interest rate is below equilibrium, then the quantity demanded of interest-bearing financial assets is less than the quantity supplied, so people selling interest-bearing financial assets have to offer higher interest rates to get people to buy them, thus raising interest rates back to the equilibrium level.

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Definitions:

Government Regulation

Policies and rules established by government bodies to control and guide the activities of businesses and individuals within the society.

Government Ownership

Refers to assets and enterprises owned by the government or public authorities, intended for public benefit or strategic interests.

Short Run

A timeframe in economics where at least one factor of production is fixed, limiting immediate adjustments to changes in demand or supply.

Barriers To Entry

Economic or legislative obstacles that prevent new competitors from easily entering an industry or area of business.