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Suppose the Current Real Interest Rate Is 4 Percent and the Equilibrium

Question 80

Multiple Choice

Suppose the current real interest rate is 4 percent and the equilibrium real interest rate is 3 percent. Then


A) prices rise and inflation occurs.
B) there is a surplus of loanable funds.
C) there is a shortage of loanable funds.
D) there is neither a shortage nor surplus of loanable funds.

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