Technological progress that increases the expected profit shifts the demand for loanable funds curve
A) rightward and reduces the real interest rate.
B) rightward and increases the real interest rate.
C) leftward and increases the real interest rate.
D) leftward and reduces the real interest rate.

Question

Quizplus · Accepted Answer

Technological progress that increases expected profit leads to more investment opportunities, increasing the demand for loanable funds, which shifts the curve rightward and typically raises the real interest rate due to higher demand for funds.

Technological Progress That Increases the Expected Profit Shifts the Demand