Refer to the figure above. Which of the following statements is true when the credit demand curve is CD1 and the credit supply curve is CS1?
A) At all rates of interest above 3% there will be a tendency for real interest rates to fall.
B) At all rates of interest above 4% there will be a tendency for real interest rates to fall.
C) At all rates of interest above 2% there will be a tendency for real interest rates to fall.
D) At all rates of interest above 1% there will be a tendency for real interest rates to fall.
ANSWER
B
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