If There Is Shortage of Loanable Funds, Which of the Following

question 142

Multiple Choice

If there is shortage of loanable funds, which of the following is most likely to happen?

• A)The supply for loanable funds shifts right and the demand shifts left.
• B)The supply for loanable funds shifts left and the demand shifts right.
• C)Neither curve shifts, but the quantity of loanable funds supplied increases and the quantity demanded decreases as the interest rate rises to equilibrium.
• D)Neither curve shifts, but the quantity of loanable funds supplied decreases and the quantity demanded increases as the interest rate falls to equilibrium.

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Definitions:

Charter of Rights

A document that outlines and guarantees fundamental freedoms and rights to individuals, often within a constitutional framework.

Freedoms

The powers or rights to act, speak, or think as one wants without hindrance or restraint.

Legal System

The framework of rules, courts, and processes established by a government to administer justice and resolve legal disputes.

Equity

The concept of fairness and justice in the legal system, often leading to remedies not provided by common law.