The_________ rate of interest creates an equilibrium between the supply of savings and the demandfor investment funds.

Question

Quizplus · Accepted Answer

The equilibrium between the supply of savings and the demand for investment funds is based on the real rate of interest, which adjusts for inflation. Only option D, which refers to the real interest rate, takes into account the inflationary effects on the equilibrium.

The_________ Rate of Interest Creates an Equilibrium Between the Supply