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

question 219

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

---

Definitions:

Exports

The sale of goods and services produced in one country to residents of other countries.

Domestic Saving

The part of a nation's income that is not spent on consumption or government expenditure, and is instead saved or invested domestically.

Domestic Investment

Investments within a country's borders by both the public and private sectors, contributing to the nation's overall economic growth.

Open Economies

refers to countries or markets that engage in free trade with other countries, allowing goods, services, and capital to move across borders with minimal restrictions.