-In the above figure, new expectations of booming business conditions and a higher expected profit will
A) shift the demand for loanable funds curve rightward.
B) shift the demand for loanable funds curve leftward.
C) make the demand for loanable funds curve become horizontal.
D) have no effect on the demand for loanable funds curve.

Question

-In the above figure, new expectations of booming business conditions and a higher expected profit will
A) shift the demand for loanable funds curve rightward. 
B) shift the demand for loanable funds curve leftward. 
C) make the demand for loanable funds curve become horizontal. 
D) have no effect on the demand for loanable funds curve.

Quizplus · Accepted Answer

New expectations of booming business conditions and higher expected profits will increase the demand for investment, leading to a rightward shift in the demand for loanable funds curve as businesses seek more funds to finance new projects.

-In the Above Figure, New Expectations of Booming Business Conditions