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.
Correct Answer:
Verified
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Q117: Figure 26-1.The figure depicts a demand-for-loanable-funds curve
Q118: Figure 26-3.The figure shows two demand-for-loanable-funds curves
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Q225: Figure 26-3
The figure shows two demand-for-loanable-funds curves
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