The equilibrium real interest rate is 5 percent. If the real interest rate is
A) anything other than 5 percent, the supply of loanable funds curve and/or the demand for loanable funds curve will shift to move the real interest rate to 5 percent.
B) 6 percent, the demand for loanable funds curve will shift rightward as firms enter the market to borrow at the lower rate.
C) 2 percent, there is a shortage of loanable funds.
D) 8 percent, there is a surplus of loanable funds.
E) 3 percent, then the supply of loanable funds curve will shift leftward as new savers enter the market.
D
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A good can serve as money only if
A) citizens accept the good as a means of payment for transactions and debts. B) government mandates that the good must be accepted in payment of debts. C) it is declared by authorities to be legal tender. D) it has intrinsic value or if it is backed by precious metals.
The International Monetary Fund was created to facilitate the borrowing and lending of dollar reserves to central banks of the countries participating in the Bretton Wood System
Indicate whether the statement is true or false