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What Happens to the Demand for Loanable Funds Curve When

Question 124

Multiple Choice

What happens to the demand for loanable funds curve when the economy enters a recession?


A) The demand for loanable funds curve shifts leftward because the real interest rate falls.
B) The demand for loanable funds curve shifts leftward because wealth decreases.
C) The demand for loanable funds curve shifts rightward because the real interest rate falls.
D) The demand for loanable funds curve shifts rightward because expected profit falls.
E) The demand for loanable funds curve shifts leftward because expected profit falls.

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