The loanable funds market is currently at equilibrium, and a nominal interest rate ceiling is set at this equilibrium rate. Now suppose that the rate of inflation falls. Does the ceiling lead to a shortage in the loanable funds market? Explain using a graph in your answer. (Instead of the nominal interest rate, use the real interest rate as your y-axis variable.)

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The Answer of The loanable funds market is currently at equilibrium, and a nominal interest rate ceiling is set at this equilibrium rate. Now suppose that the rate of inflation falls. Does the ceiling lead to a shortage in the loanable funds market? Explain using a graph in your answer. (Instead of the nominal interest rate, use the real interest rate as your y-axis variable.)

The Loanable Funds Market Is Currently at Equilibrium, and a Nominal