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.
Question 2
What is a shortcoming of price control legislation?
a. Price controls lower the quantity demanded.
b. Price controls often lead to reduced product quality.
c. Price controls create surpluses.
d. All of the above are shortcomings of price controls.
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