-In the Above Figure, the Economy Is at Point a on the Initial

question 221

Multiple Choice

-In the above figure, the economy is at point a on the initial demand for loanable funds curve DLF₀. What happens if the real interest rate rises?

• A) The demand for loanable funds curve shifts leftward to a curve such as DLF₁.
• B) There is a movement to a point such as b on the demand for loanable funds curve DLF₀.
• C) The demand for loanable funds curve shifts rightward to a curve such as DLF₂.
• D) none of the above

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