-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:

Dissolution

The process of a solid substance becoming incorporated into a liquid to form a solution.

Limestone

A sedimentary rock composed mainly of calcium carbonate, often formed from the shells and skeletons of marine organisms.

Outer Weathered Zone

The top layer of the Earth's surface, altered by weathering processes, involving the physical and chemical breakdown of rocks and minerals.

Fractured Rocks

Rocks that have been broken or cracked through natural processes or human activity, often creating pathways for the movement of fluids or gases.