-In the Above Figure, the Economy Is at Point a on the Initial

question 138

Multiple Choice

-In the above figure, the economy is at point a on the initial supply of loanable funds curve SLF₀. What happens if disposable income decreases?

• A) Nothing; the economy would remain at point a.
• B) There would be a movement to a point such as b on supply of loanable funds curve SLF₀.
• C) The supply of loanable funds curve would shift rightward to a curve such as SLF₂.
• D) The supply of loanable funds curve would shift leftward to a curve such as SLF₁.