Figure 61 Alt Text for Figure 6

Figure 6.1 Alt text for Figure 6.1: In figure 6.1, a graph comparing loanable funds and real interest rate.
Long description for Figure 6.1: The x-axis is labelled, loanable funds (billions of dollars per year) , with values L1 and L2 marked.The y-axis is labelled, real interest rate, with values i1 and i2 marked.3 lines are plotted; Demand D1, D2 and S.Line D1 begins at the top left corner and slopes down to centre bottom.Line D2 follows the same slope as D1, but is plotted to the right.The line S begins near the origin and slopes up to the top right corner.The area between lines D1 and D2 is indicated by a right pointing arrow.Line S intersects line D1 at the point (L1, i1) , approximately 3 quarters of the way along both lines.S intersects D2 at the point (L2, i2) approximately 3 quarters of the way along both lines.These points of intersection are connected to the corresponding values on the x-axis and y-axis by dotted lines.Between the dotted lines, a rightward arrow points from L1 toward L2, and another arrow points up from i1 toward i2.
-Refer to Figure 6.1.Which of the following is consistent with the graph depicted above?

A) An expected recession decreases the profitability of new investment.
B) Technological change increases the profitability of new investment.
C) The government runs a budget surplus.
D) Households become spendthrifts and begin to save less.
E) Government making more effort to balance the budget.