In 2007 the real interest rate in the United States was 2 percent. By 2013, the equilibrium real interest in the United States was ________ because the ________.
A) 0.5 percent; United States experienced a deep recession as a result of a financial crisis in 2008-2009
B) 0.5 percent; United States began to recover from the deep recession and financial crisis of 2008-2009
C) 3.5 percent; United States began to recover from the deep recession and financial crisis of 2008-2009
D) 3.5 percent; United States experienced a deep recession as a result of a financial crisis in 2008-2009
E) not yet calculated; effects of the financial crisis of 2008-2009 have not yet been tallied
The figure above shows the demand for loanable funds curve.
Question 2
You decide to spend time studying for a philosophy exam, even though you have offers to go to see a movie, go out to dinner, or go to a poetry reading.
This is a difficult choice for you because you really want to go to the poetry reading and would choose that over seeing the movie or going out to dinner. Your opportunity cost of spending time studying for your philosophy exam is A) going to the movie.
B) going out to dinner.
C) going to the poetry reading.
D) all of the above, since you have offers to do all three
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