If the real interest rate increases from 3 percent to 5 percent
A) the nominal interest rate will also increase.
B) the demand for loanable funds curve will shift rightward.
C) there will be a movement up along the demand for loanable funds curve.
D) the supply of loanable funds curve will shift rightward.
Question 2
Which of the following statements are TRUE regarding the demand for labor?
I. The quantity of labor demanded depends on the real wage rate.
II. If the money wage rate increases and the price level remains the same, the quantity of labor demanded decreases.
A) I only
B) II only
C) I and II
D) neither I nor II