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

question 91

Multiple Choice

-In the above figure, the initial supply of loanable funds curve is SLF0 and the demand for loanable funds investment curve is DLF0. An increase in the real interest rate to 7 per cent could be caused by

• A)a decrease in the expected profit.
• B)an increase in people's disposable incomes.
• C)an expansion that increased both saving and investment by the same amount.
• D)an increase in investment demand.

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Definitions:

Recognition Lag

The time delay between when an economic problem or trend occurs and when it is recognized by policymakers or economists.

Recession

A period of significant decline in economic activity across the economy, lasting more than a few months, typically visible in GDP, income, employment, and trade.

Policy Makers

Individuals or groups responsible for creating and implementing policies or regulations within organizations or government.

Economy

The economy encompasses all activities related to production, consumption, and trade of goods and services in an area, showcasing how resources are managed and utilized.