-In the Above Figure, the Initial Supply of Loanable Funds

question 30

Multiple Choice

-In the above figure, the initial supply of loanable funds curve is SLF₀ and the initial demand for loanable funds curve is DLF₀. An economic expansion that raises disposable income and the expected profit would

• A) only shift the supply of loanable funds curve rightward to a curve such as SLF₁.
• B) have no effect on either the demand for loanable funds curve or the supply of loanable funds curve.
• C) shift the supply of loanable funds curve rightward to a curve such as SLF₁, and shift the demand for loanable funds curve rightward to a curve such as DLF₁.
• D) only shift the demand for loanable funds curve rightward to a curve such as DLF₁.

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Definitions:

Marginal Product

The additional output resulting from one more unit of a given input, holding all other inputs constant.

Average Product

The output per unit of input, measured by dividing the total product by the quantity of input.

Average Product

The output per unit of input, calculated by dividing total production by the number of units of input.

Marginal Product

The additional output that is produced by adding one more unit of a particular input, keeping other inputs constant.