-In the figure above, the leftward shift from the demand for loanable funds curve DLF₁ to the demand for loanable funds curve DLF₃, could be the result of
A) a fall in the interest rate.
B) a decrease in expected profit.
C) an advancement in technology.
D) an increase in the population.
E) a rise in the interest rate.

Question

-In the figure above, the leftward shift from the demand for loanable funds curve DLF₁ to the demand for loanable funds curve DLF₃, could be the result of
A) a fall in the interest rate. 
B) a decrease in expected profit. 
C) an advancement in technology. 
D) an increase in the population. 
E) a rise in the interest rate.

Quizplus · Accepted Answer

A decrease in expected profit would reduce the demand for loanable funds as businesses are less likely to invest in new projects, leading to a leftward shift in the demand curve.

-In the Figure Above, the Leftward Shift from the Demand