Which Event Could Be Expected to Shift a Nation's Demand

question 58

Multiple Choice

Which event could be expected to shift a nation's demand for loanable funds,as shown in the accompanying graph?

• A) an increase in the productivity of capital
• B) a decrease in investor confidence
• C) an increase in consumer wealth
• D) an increase in time preferences
• E) a rise in the number of workers in their prime earning years

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Definitions:

Exchange Rate

The value of one currency for the purpose of conversion to another, indicating how much one currency is worth in terms of the other.

Euros

The official currency of the eurozone, which consists of 19 of the 27 European Union member states.

Effective Interest Rate

The real rate of interest earned or paid on a loan or investment, taking into account the effect of compounding interest as opposed to the nominal rate.

Mexican Pesos

The currency of Mexico, represented by the symbol $ or MXN, used for all financial transactions within the country.