1.Decide to increase require reserve ratio,will affect the equilibrium level of

Question

1.Decide to increase require reserve ratio,will affect the equilibrium level of interest rates. Its effects are that it causes the?curve for loanable funds shift to the?resulting in?interest rates. a. demand,left,lower b. demand,right,higher c. supply,left higher d. supply,right,lower 2.borrowers &lenders agree to1 year loan when the expected inflation rate3% for year.Instead of 3% inflation the economy only experiences1% inflation.so at the end of the year which is true? a.the real interest rate on the loan will be higher than expected and will exceed the nominal rate of interest. b. .the real interest rate will be the same as expected before,and below the nominal rate of interest c. the real interest rate on the loan will be lower than expected and will exceed the nominal interest razte of interest d. the real interest rate on the loan will be higherthan expected and will be less than the noiminal rate of interest

Explanation / Answer

c. supply,left higher

a.the real interest rate on the loan will be higher than expected and will exceed the nominal rate of interest.

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