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

Question

Quizplus · Accepted Answer

An increase in expected profit leads to an increase in investment, which in turn leads to an increase in demand for loanable funds, shifting the demand curve for loanable funds to the right.

The Demand for Loanable Funds Curve Shifts Rightward When