When business firms become more pessimistic about the state of the economy,the:
A) demand to borrow shifts outward.
B) demand to borrow shifts inward.
C) supply of savings shifts outward.
D) supply of savings shifts inward.

Question

Quizplus · Accepted Answer

When business firms become more pessimistic about the state of the economy, they are less likely to invest in new projects, and therefore, the demand for borrowing decreases. This causes the demand to shift inward.

When Business Firms Become More Pessimistic About the State of the Economy,the