As a Result of the Recession in 2008, the Default

question 148

Multiple Choice

As a result of the recession in 2008, the default risk increased. How did this change affect the loanable funds market?

• A) There was a leftward shift in the supply of loanable funds curve.
• B) There was a movement down along the demand for loanable funds curve.
• C) There was a rightward shift in the supply of loanable funds curve.
• D) There was a movement up along the supply of loanable funds curve.

---

Definitions:

Aggregate Demand

Aggregate demand represents the total demand for goods and services within an economy at a given overall price level and time period.

John Maynard Keynes

A British scholar in economics whose contributions had a profound impact on how macroeconomics is understood and applied by governments.

Unemployment Rate

A measure indicating the proportion of the workforce that is not employed but is actively seeking work and willing to work.

Recessionary Gap

The difference between the actual output of an economy and the output it would produce if it were at full employment, indicating underperformance.