Other things the same, a higher interest rate induces people to()
A. save more, so the supply of loanable funds slopes upward.
B. save less, so the supply of loanable funds slopes downward.
C. invest more, so the supply of loanable funds slopes upward.
D. invest less, so the supply of loanable funds slopes downward.
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If the quantity of loanable funds demanded exceeds the quantity of loanable funds supplied()
A. there is a surplus and the interest rate is above the equilibrium level.
B. there is a surplus and the interest rate is below the equilibrium level.
C. there is a shortage and the interest rate is above the equilibrium level.
D. there is a shortage and the interest rate is below the equilibrium level.
If the demand for loanable funds shifts to the right, then the equilibrium interest rate()
A. and quantity of loanable funds rise.
B. and quantity of loanable funds fall.
C. rises and the quantity of loanable funds falls.
D. falls and the quantity of loanable funds rises.
If the supply for loanable funds shifts to the left, then the equilibrium interest rate()
A. and quantity of loanable funds rise.
B. and quantity of loanable funds fall.
C. rises and the quantity of loanable funds falls.
D. falls and the quantity of loanable funds rises.
If the nominal interest rate is 5 percent and the rate of inflation is 2 percent, then the real interest rate is()
A. 7 percent.
B. 3 percent.
C. 2.5 percent.
D. 4 percent.
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