Refer to the Figure Below to Answer the Following Questions

question 28

Multiple Choice

Refer to the figure below to answer the following questions.
Figure 7.2.4
-In Figure 7.2.4, the economy is at point A.What happens if disposable income decreases?

• A)Nothing; the economy would remain at point A.
• B)There is a movement to a point such as B.
• C)The supply of loanable funds curve becomes downward sloping.
• D)The supply of loanable funds curve shifts rightward to a curve such as SLF₂.
• E)The supply of loanable funds curve shifts leftward to a curve such as SLF₁.

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Definitions:

Project's NPV

Net Present Value; a financial metric used to evaluate the profitability of an investment or project, calculated by discounting the expected cash flows to their present value and subtracting the initial investment.

Decision Tree Analysis

A tool used in decision making to visually map out possible outcomes of a decision, factoring in probabilities and costs or benefits.

NPV Distribution

Refers to the distribution of net present values across different potential investments or projects.

Conditional Probability

The probability of one event occurring with some relationship to one or more other events.