A decrease in the demand for loanable funds and a leftward shift of the demand for loanable funds curve results from
A) decreases in the expected profit.
B) technological improvements.
C) tax cuts.
D) an increase in the real interest rate.

Question

Quizplus · Accepted Answer

A decrease in expected profit reduces the incentive for firms to borrow and invest, leading to a decrease in the demand for loanable funds and a leftward shift of the demand curve.

A Decrease in the Demand for Loanable Funds and a Leftward