In the short run, the real interest rate equals the natural real rate

Real and nominal interest rates

The real interest rate is ________ related to the supply of loanable funds because ________. a. negatively; the opportunity cost of consumption expenditure increases as the real interest rate rises b. negatively; people are motivated to save more as the real interest rate rises c. positively; people are motivated to increase their consumption expenditure as the real interest rate rises d. positively; the opportunity cost of consumption expenditure increases as the real interest rate rises

Consider a small open economy that takes the world real interest rate as given. Suppose the world real interest rate is less than the country’s autarky real interest rate. Which of the following is TRUE?  Domestic saving exceeds domestic investment   There is capital outflow   There is excess demand for capital   None of the other options

In models with perfect competition,Question 17AnswerSelect one:a.the real interest rate is equal to the nominal interest rate.b.income paid to labour is the same as is paid to capital.c.economic profits are always positive.d.economic profits are zero.e.accounting profits are zero.

Which of the following describes current short term interest rates?1 pointThey are approximately equal to zeroThey are very highThey are strongly negativeThey are changing for the first time in the last 100 years