In the model of the market for loanable funds,which of the following will not shift the demand curve for loanable funds?

Question

Quizplus · Accepted Answer

Lower interest rates would not shift the demand curve for loanable funds because it would be reflected in a movement along the existing demand curve, rather than a shift in the curve itself. This is because lower interest rates make borrowing more attractive to businesses and individuals, increasing the quantity of loanable funds demanded at each interest rate. Expectations of high returns, the effects of technological change on profitability, and the expectation of a recession by businesses would all lead to shifts in the demand curve as they would affect the willingness of businesses and individuals to borrow and invest.

In the Model of the Market for Loanable Funds,which of the Following