Figure 13-4

Multiple Choice

Figure 13-4. On the horizontal axis of the graph, L represents the quantity of loanable funds in billions of dollars.
-Refer to Figure 13-4. If the equilibrium quantity of loanable funds is $56 billion and if the rate of inflation is 4 percent, then the equilibrium real interest rate is

A) lower than 6 percent..
B) 6 percent.
C) between 6 percent and 8 percent.
D) higher than 8 percent.