Suppose That the Initial Supply of Loanable Funds Curve Is

question 25

Multiple Choice

Suppose that the initial supply of loanable funds curve is SLF1. In the figure above, an increase in the real interest rate leads to
I. a shift in the supply of loanable funds curve from SLF1 to SLF2.
Ii. a shift in the supply of loanable funds curve from SLF1 to SLF3.
iii. a movement along the supply of loanable funds curve SLF1.
Iv. no change whatever.

• A)i and iii
• B)ii only
• C)iii only
• D)i only
• E)iv only

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Definitions:

RRSP

A Registered Retirement Savings Plan that allows Canadians to save for retirement on a tax-deferred basis.

RRSP

Registered Retirement Savings Plan, a retirement savings and investing vehicle for employees and the self-employed in Canada that offers tax benefits.

Ordinary Annuity

A series of equal payments made at regular intervals, with the interest compounding at the end of each period; commonly found in retirement accounts and loan repayments.

Ordinary Annuity

A financial product resulting in payments of a fixed amount received or paid at the end of period intervals.