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Questions and Answers
Which of the following factors can cause the equilibrium interest rate to change over time?
Which of the following factors can cause the equilibrium interest rate to change over time?
- Economic growth (correct)
- Lower level of savings
- Decreased inflation
- Reduced government borrowing
What effect does increased government borrowing have on the equilibrium interest rate?
What effect does increased government borrowing have on the equilibrium interest rate?
- It causes the equilibrium interest rate to fluctuate
- It decreases the equilibrium interest rate
- It increases the equilibrium interest rate (correct)
- It has no effect on the equilibrium interest rate
How does higher inflation impact the equilibrium interest rate?
How does higher inflation impact the equilibrium interest rate?
- It causes the equilibrium interest rate to fluctuate
- It has no effect on the equilibrium interest rate
- It increases the equilibrium interest rate (correct)
- It decreases the equilibrium interest rate
What is another term for the equilibrium interest rate?
What is another term for the equilibrium interest rate?
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How does a higher level of savings impact the equilibrium interest rate?
How does a higher level of savings impact the equilibrium interest rate?
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