Figure 26-4

question 51

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 $56 billion and if the rate of inflation is 5 percent,then the equilibrium nominal interest rate is

• A)11 percent.
• B)approximately 6 percent.
• C)between 6 percent and 8 percent.
• D)between 11 percent and 13 percent.

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Definitions:

Piece-rate Plans

A compensation system where employees are paid based on the quantity of work completed, rather than hours worked.

Gainsharing Plans

Performance-based compensation programs where savings or gains from increased productivity and cost-efficiency are shared with employees.

Share Options

Financial derivative instruments that give the holder the right, but not the obligation, to buy or sell company shares at a specified price before a specified date.

Share Option Plans

Compensation strategies used by organizations to offer employees the option to buy company shares at a future date at a price established when the option is granted, incentivizing long-term commitment.