Which of the following statements is true?
A) An excess demand for credit exerts an upward pressure on the real rate of interest.
B) At rates of interest below the equilibrium rate, there is an excess supply of credit.
C) An excess supply of credit exerts an upward pressure on the real rate of interest.
D) At rates of interest above the equilibrium rate, there is an excess demand for credit.
A
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Establishing a unit of value and establishing a standard means of payment are two functions of a monetary system
a. True b. False
Assume that an inferior good is produced in a perfectly competitive, increasing-cost industry with external diseconomies. The market is initially in long-run equilibrium. After all long-run adjustments are made, which of the following would occur in this market as a result of an increase in consumers' incomes?
a. The market price would remain unchanged; the market quantity would rise. b. The market price would rise; the market quantity would fall. c. The market price would remain unchanged; the market quantity would fall. d. Both the market price and the market quantity would fall. e. Both the market price and the market quantity would rise.