Use the following to answer question(s) : Loanable Funds and Capital Markets
-(Exhibit: Loanable Funds and Capital Markets) A decrease in the demand for capital, as shown in Panel (b) as a movement from D₂ to D₁, will lead to:
A) the movement from D₁ to D₂ in Panel (a) .
B) the movement from D₂ to D₁ in Panel (a) .
C) a decrease in the quantity of capital demanded, as shown in Panel (d) when the interest rate rises from r₁ to r₂.
D) none of the above.
Correct Answer:
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