Financial Institutions Markets and Money
Quiz 4: The Level of Interest Rates
An Increase in Rates of Return on Real Capital Investment
An increase in rates of return on real capital investment will increase real interest rates.
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An increase in the desired saving rate will increase real interest rates.
Deficit spending units supply loanable funds.
If yields on thirty-year U. S. Treasury bonds are 8% and the real rate of interest is estimated at 3%, the historical rate of inflation is 5%.
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