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Figure 26-4

question 342

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Figure 26-4. On the horizontal axis of the graph, L represents the quantity of loanable funds in billions of dollars. Figure 26-4. On the horizontal axis of the graph, L represents the quantity of loanable funds in billions of dollars.   -Refer to Figure 26-4. Regard the position of the Supply curve as fixed, as on the graph. If the real interest rate is 8 percent, the inflation rate is 3 percent, and the market for loanable funds is in equilibrium, then the position of the demand-for-loanable-funds curve must be A)  D<sub>1</sub>. B)  D<sub>2</sub>. C)  between D<sub>1</sub> and D<sub>2</sub>. D)  to the right of D<sub>2</sub>.
-Refer to Figure 26-4. Regard the position of the Supply curve as fixed, as on the graph. If the real interest rate is 8 percent, the inflation rate is 3 percent, and the market for loanable funds is in equilibrium, then the position of the demand-for-loanable-funds curve must be

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Definitions:

Consume Goods

The act of using up goods and services for personal needs or consumption.

Save Money

The practice of reducing expenditures or setting aside funds to increase financial security or for future use.

Net Present Value

Net Present Value (NPV) is a financial metric that calculates the present value of all cash flows associated with a project, including both inflows and outflows, to determine its profitability.

Interest Rate

The percentage at which interest is paid by a borrower for the use of money that they borrow from a lender.

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