Refer to the Following Graph to Answer the Following Questions

question 142

Multiple Choice

Refer to the following graph to answer the following questions:
-Assuming the figure represents the market for loanable funds,which of the following would represent a general economic collapse in the United States,causing foreigners to become fearful about the U.S.economy?

• A) a shift from line 1 to line 4
• B) a shift from line 3 to line 2
• C) a shift from line 2 to line 3
• D) a shift from line 4 to line 1
• E) a new shortage of loanable funds represented by the distance from C to D

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Definitions:

Position

In finance, a position refers to the amount of a particular asset or security that is owned by an individual or entity.

Futures Contract

A contractual arrangement to purchase or sell a specific financial instrument or commodity at a set price on a future date.

Basis

The difference between the spot price of an asset and its future price, or the cost basis of an investment.

Futures Price

The agreed price for the future delivery of assets in a futures contract.