Figure 26-4

question 77

Multiple Choice

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.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:

Upper-Class People

Individuals or groups that occupy the highest social and economic positions in a society.

Leisure Time

Periods of time free from work or duties, during which individuals can pursue activities they enjoy for relaxation or pleasure.

Recreation

Activities or experiences chosen freely for enjoyment, relaxation, or other personal satisfaction, often distinct from work or daily obligations.

Magic Bullet Theory

A media theory suggesting that mass media messages have a direct and powerful effect on the audience, like a bullet, without any interference in how the message is interpreted.