The supply of loanable funds curve has a positive slope because the
A) lower the real interest rate, the higher the return to saving.
B) lower the real interest rate, the lower the return to saving.
C) average return in the stock market is directly related to the real interest rate.
D) quantity of investment increases when the real interest rate increases.
E) higher the real interest rate, the lower the return to saving.
Question 2
The short-run Phillips curve is a curve that shows the relationship, other things being constant, between ________ and ________.
A) the inflation rate; the nominal interest rate
B) the inflation rate; the expected inflation rate
C) the unemployment rate; real GDP
D) potential GDP; the natural unemployment rate
E) the inflation rate; the unemployment rate
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