If Firms Became More Optimistic About the Future of the Economy

question 49

Multiple Choice

If firms became more optimistic about the future of the economy, which of the following occurs?

• A)The saving decreases and the supply of loanable funds curve shifts leftward.
• B)The quantity of investment demanded decreases and there is a movement up along the demand for loanable funds curve.
• C)Investment demand decreases and the demand for loanable funds curve shifts leftward.
• D)Investment demand increases and the demand for loanable funds curve shifts rightward.
• E)The quantity of investment demanded increases and there is a movement down along the demand for loanable funds curve.

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Definitions:

Placebo

A substance or treatment which is designed to have no therapeutic value, commonly used as a control in testing new drugs.

Correlation Coefficient

A statistical measure that describes the degree to which two variables move in relation to each other, ranging from -1 to 1.

Perfect Correlation

A statistical relationship indicating a flawless direct or inverse linkage between two variables.

Matched Design

A research design that matches the experimental participants with control participants who are similar on key characteristics.