As a Result of a Recession, the Default Risk Increases

question 125

Multiple Choice

As a result of a recession, the default risk increases. How does this change affect the loanable funds market?

• A)There is a movement up along the supply of loanable funds curve.
• B)There is a leftward shift of the supply of loanable funds curve.
• C)There is a movement down along the demand for loanable funds curve.
• D)There is a rightward shift of the supply of loanable funds curve.
• E)There is a rightward shift of the demand for loanable funds curve.

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Definitions:

Interior

The internal part or inside space of something, such as a building or vehicle.

Consumer Price Index

An index measuring the change in the price level of a basket of consumer goods and services purchased by households.

Year 3 Dollars

Year 3 dollars refer to the value of money adjusted for price changes (inflation or deflation) to a specific year's average price level, often used for comparison over different times.

Food Expenditures

The amount of money spent by households or individuals on purchasing food for consumption.