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Unformatted text preview: shifts the demand for loanable funds to the left, reducing interest rates. shifts the supply of loanable funds to the right, reducing interest rates. shifts the demand for loanable funs to the right, increasing interest rates. shifts the supply of loanable funds to the left, reducing interest rates. 6. Basic approaches to forecasting interest rates include economic models flow-of-funds both of the above none of the above 7. With the real rate at 3 percent, most loans were made at 10 percent last year. This year interest rates have declined to 8 percent. What was the expected inflation rate last year? 5% 2% 7% 8% 8. If the real rate of interest is 4%, actual inflation for the last year was 5%, and expected inflation is 8%, the Fisher effect predicts what current level of nominal interest rates? 9% 8% 13% 12%...
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This note was uploaded on 01/05/2012 for the course 101 melissa jo taught by Professor Acc101 during the Spring '11 term at Aarhus Universitet.
- Spring '11