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The Equilibrium Interest Rate

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Questions and Answers

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?

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?

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?

<p>Natural rate of interest (B)</p> Signup and view all the answers

How does a higher level of savings impact the equilibrium interest rate?

<p>It decreases the equilibrium interest rate (C)</p> Signup and view all the answers

The Equilibrium Interest Rate

Choose a study mode

Podcast

Questions and Answers

Which of the following factors can cause the equilibrium interest rate to change over time?

What effect does increased government borrowing have on the equilibrium interest rate?

How does higher inflation impact the equilibrium interest rate?

What is another term for the equilibrium interest rate?

How does a higher level of savings impact the equilibrium interest rate?

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