Figure 8-4

question 300

Multiple Choice

Figure 8-4. On the horizontal axis of the graph, L represents the quantity of loanable funds in billions of dollars.

-Refer to Figure 8-4. 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.

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Definitions:

Skills And Abilities

The competencies and capabilities that an individual possesses, which are necessary for performing tasks or jobs effectively.

Education

The process of receiving or giving systematic instruction, especially at a school or university.

Trend Analysis

The practice of collecting information and attempting to spot a pattern, often used in financial markets, but also applicable in analyzing business metrics over time.

Delphi Technique

A method used for forecasting or decision making that involves a panel of experts answering questionnaires in several rounds, with the anonymous responses being aggregated and shared with the panel after each round until a consensus is reached.