-In the above figure, if the real interest rate is 8, there is
A) underproduction in this economy.
B) a surplus of loanable funds.
C) a shortage of loanable funds.
D) a shortage in available funds for investment.

Question

-In the above figure, if the real interest rate is 8, there is
A) underproduction in this economy. 
B) a surplus of loanable funds. 
C) a shortage of loanable funds. 
D) a shortage in available funds for investment.

Quizplus · Accepted Answer

A real interest rate of 8% suggests that the cost of borrowing is high, leading to a surplus of loanable funds as fewer people are willing to borrow at this rate.

-In the Above Figure, If the Real Interest Rate Is