The demand for loanable funds curve shows that as the interest rate increases, there will be a curve.
A) nominal; movement down along
B) real; movement up along.
C) nominal; rightward shift in
D) real; rightward shift in

Question

Quizplus · Accepted Answer

The demand for loanable funds curve shows the relationship between the interest rate and the demand for funds for investment purposes, which is a real relationship. As the interest rate increases, the demand for loanable funds decreases, leading to a movement up along the curve. Changes in nominal variables, such as inflation, would result in a rightward shift in the demand for loanable funds curve, but this does not correspond to the given question.

The Demand for Loanable Funds Curve Shows That as the Interest