-In the above figure, the initial supply of loanable funds curve is SLF₀and the demand for loanable funds investment curve is DLF₀. An increase in the real interest rate to 7 percent could be caused by A) an increase in investment demand. B) an expansion that increased both saving and investment by the same amount. C) a decrease in the expected profit. D) an increase in peopleʹs disposable incomes.

Question

Quizplus · Accepted Answer

An increase in investment demand will shift the demand curve to the right, causing the equilibrium interest rate to rise.

-In the Above Figure, the Initial Supply of Loanable Funds