For an imaginary economy, when the real interest rate is 7 percent, the quantity of loanable funds demanded is $500 and the quantity of loanable funds supplied is $500 . Currently, the nominal interest rate is 9 percent and the inflation rate is 4 percent. Currently,
a. the market for loanable funds is in equilibrium.
b. the quantity of loanable funds supplied exceeds the quantity of loanable funds demanded, and as a result the real interest rate will rise.
c. the quantity of loanable funds supplied exceeds the quantity of loanable funds demanded, and as a result the real interest rate will fall.
d. the quantity of loanable funds demanded exceeds the quantity of loanable funds supplied, and as a result the real interest rate will rise.
d
You might also like to view...
Which is an example of money as a unit of account?
a. purchasing a toy for $8.99 b. lending a friend $25.00 c. opening a savings account at a bank d. checking the price of a camera at several stores before buying it at the lowest price
The presidents most closely associated with the Great Depression were __________ and ____________.
Fill in the blank(s) with the appropriate word(s).