-In the above figure, the demand for loanable funds curve is drawn for the average expected profit. If the real interest rate is constant at 6 percent and the expected profit falls, the amount of loanable funds demanded will be
A) between $450 billion and $600 billion.
B) less than $450 billion.
C) greater than $600 billion.
D) $450 billion.

Question

-In the above figure, the demand for loanable funds curve is drawn for the average expected profit. If the real interest rate is constant at 6 percent and the expected profit falls, the amount of loanable funds demanded will be
A) between $450 billion and $600 billion. 
B) less than $450 billion. 
C) greater than $600 billion. 
D) $450 billion.

Quizplus · Accepted Answer

If the expected profit falls, the demand for loanable funds decreases, leading to a lower quantity of loanable funds demanded, which would be less than $450 billion.

-In the Above Figure, the Demand for Loanable Funds Curve