Figure 26-4

question 424

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. 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) D1.
• B) D2.
• C) between D1 and D2.
• D) to the right of D2.

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Definitions:

Percent

A mathematical term that represents a number as a fraction of 100.

Cent

A unit of currency used in several nations, equivalent to 1/100th of a dollar, euro, or similar decimal-based currency.

Significant Figures

The digits of a number that are meaningful in terms of accuracy or precision, important in scientific and mathematical calculations.

Percent

A part or other object per hundred, used in mathematics to describe how one quantity relates to another in terms of proportion or fraction.