If a series of major technological breakthroughs occur in the economy at the same time, then the most likely outcome would be that the economy's
A) demand curve for loanable funds will shift downward.
B) demand curve for loanable funds will shift upward.
C) consumption curve will shift downward.
D) position along the existing demand curve for loanable funds will move upward.

Question

Quizplus · Accepted Answer

When major technological breakthroughs occur in the economy, it is likely that firms will want to invest in new technology to increase productivity and efficiency. This investment will require funding, which will increase the demand for loanable funds. As a result, the demand curve for loanable funds will shift upward, leading to higher interest rates and a higher quantity of funds borrowed and invested.

If a Series of Major Technological Breakthroughs Occur in the Economy