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Ultimate Flashcard Review
Practice Questions: Test Your Understanding
Apply what you've learned with these practice questions. These questions test your understanding of the key concepts.
Question 1 of 3
If the government significantly increases its borrowing to finance large budget deficits, what is the likely impact in the loanable funds market?
Demand for loanable funds decreases, real interest rate decreases.
Supply of loanable funds increases, real interest rate decreases.
Demand for loanable funds increases, real interest rate increases.
Supply of loanable funds decreases, real interest rate increases.
Demand and supply of loanable funds both increase, real interest rate remains unchanged.
Key Takeaways
- 📊Master the fundamentals: Understanding these core concepts is essential for success in AP Economics.
- ✅Practice makes perfect: Use the interactive exercises and practice questions to reinforce your understanding.