-In the above figure, the initial supply of loanable funds curve is SLF 0 and the initial demand for loanable funds curve is DLF 0 . An increase in the expected profit would

An increase in expected profit would increase the demand for loanable funds as businesses seek more capital to invest in profitable projects, shifting the demand curve rightward.

-In the above figure, the initial supply of loanable funds curve is SLF 0 and the initial demand for loanable funds curve is DLF 0 . An increase in the expected profit would

An increase in expected profit would increase the demand for loanable funds as businesses seek more capital to invest in profitable projects, shifting the demand curve rightward.

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

Question 158

Multiple Choice

-In the above figure, the initial supply of loanable funds curve is SLF₀ and the initial demand for loanable funds curve is DLF₀. An increase in the expected profit would

A) only shift the supply of loanable funds curve rightward to a curve such as SLF₁.
B) shift the supply of loanable funds curve rightward to a curve such as SLF₁, and shift the demand for loanable funds curve rightward to a curve such as DLF₁.
C) only shift the demand for loanable funds curve rightward to a curve such as DLF₁.
D) have no effect on either the demand for loanable funds curve or the supply of loanable funds curve.

Correct Answer: