"In the loanable funds market, when there is a shortage of funds, the real interest rate will increase." Explain whether the previous statement is correct or not
What will be an ideal response?
The statement is correct. The shortage of loanable funds means that there are firms attempting to obtain loans who cannot do so. As a result, the real interest rate will rise until equilibrium is attained.
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A main reason for the low unemployment rate from 1995 through most of the 2000s was because of
A) higher oil prices. B) the government's policy of tightening immigration policies. C) the rapid development of the Internet industry and other new technologies. D) government's more liberal social benefit programs. E) increased defense expenditures by the government.
A consumer will consume the combination of goods at the crossing point of a budget line and indifference curve.
Answer the following statement true (T) or false (F)