Refer to the figure below to answer the following question.
Figure 7.2.1
-In Figure 7.2.1, the economy is at point A.What happens if the real interest rate rises?
A) There is a movement to a point such as B.
B) The demand for loanable funds curve shifts rightward to curve DLF2.
C) The demand for loanable funds curve shifts leftward to curve DLF1.
D) Either A or B can occur.
E) Either A or C can occur.
Correct Answer:
Verified
Q40: If national saving equals $100,000, net taxes
Q41: A fall in the real interest rate
A)shifts
Q42: The quantity of loanable funds demanded increases
Q43: Investment will be higher if
A)the government deficit
Q44: A firm's decision to invest in a
Q46: The demand for loanable funds is the
Q47: Suppose that you took out a $1,000
Q48: A rise in the real interest rate
A)shifts
Q49: A decrease in the demand for loanable
Q50: A decrease in the real interest rate
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