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

question 5

Multiple Choice

-In the above figure, the economy is at point a on the initial supply of loanable funds curve SLF₀. What happens if disposable income decreases?

• A) Nothing; the economy would remain at point a.
• B) The supply of loanable funds curve would shift leftward to a curve such as SLF₁.
• C) The supply of loanable funds curve would shift rightward to a curve such as SLF₂.
• D) There would be a movement to a point such as b on supply of loanable funds curve SLF₀.

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Definitions:

Outcome

The result or effect of an action, situation, or event, typically one that is important or considered significant.

Duopoly

Duopoly is a market structure characterized by two firms controlling the majority of the market share, often leading to strategic behavior in price and output decisions.

Profit

The financial gain achieved when the amount of revenue gained from a business activity exceeds the expenses, costs, and taxes needed to sustain the activity.

Collusion

An agreement among firms, usually in secret, to fix prices or to divide markets among themselves, which restricts competition.