"When there is a shortage of loanable 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 and others attempting to obtain loans who cannot do so. As a result, the real interest rate rises until equilibrium is attained.
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Reasons that the recession of 2008-2009 did not become a depression include:
i. The Fed bailed out troubled financial institutions. ii. The government aggressively balanced its budget. iii. The government increased its expenditures, which increased aggregate demand. A) i only B) ii only C) iii only D) i and iii E) i and ii
In the figure above, at the allocatively efficient level of computer production the marginal cost of producing a computer is
A) 0 televisions per computer. B) between 0 and 3 televisions per computer. C) 3 televisions per computer. D) more than 3 televisions per computer.