1)

Interest rates are __________ to the level of loanable funds available to borrowers. Select one: A. perfectly correlated B. inversely related C. totally disproportional D. completely unrelated

2) If inflation is anticipated to be 3.00% per year and the nominal interest rate is currently 6.50%, which of the following represents the real rate of interest under conditions of rational expectations? Select one: A. 9.50% B. 3.50% C. 6.50% D. 3.00% E. None of the above