What Changes Will a Shortage of Loanable Funds Induce in a Savings-Investment

question 91

Multiple Choice

What changes will a shortage of loanable funds induce in a savings-investment diagram in a closed economy?

• A) The demand for loanable funds curve will shift right, so the interest rate will rise.
• B) The supply of loanable funds curve will shift left, so the interest rate will fall.
• C) There will be no shifts of the curves, but the interest rate will rise.
• D) There will be no shifts of the curves, but the interest rate will fall.

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