In nations where the supply of real loanable funds is inelastic, the real risk-free interest rate is likely to:
a. To fluctuate more than the equilibrium quantity of loanable funds per period.
b. Be very stable over time and not to react strongly on changes in demand.
c. Be high compared to countries where the supply of real loanable funds is elastic.
d. None of the above.
.A
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A credible promise is:
A. in the promiser's interest to keep. B. possible to keep. C. legally enforceable. D. made by a honest person.
Assume the United States has an absolute advantage in the production of everything compared to the African nation of Berundi. Can you think of any reason why both nations would still find it to their mutual advantage to trade with each other?
What will be an ideal response?
In the United States, the dollar was commodity backed by:
A. gold. B. silver. C. oil. D. diamonds.
Comparing a uniform abatement policy, pollution tax and a command-and-control policy, which one the is most efficient approach in dealing with pollution?
A. pollution tax B. uniform abatement C. command-and-control D. All of these are equally efficient