Refer to the Figure Below to Answer the Following Questions

question 131

Multiple Choice

Refer to the figure below to answer the following questions.

Figure 23.2.4
-In Figure 23.2.4, the economy is at point A on the supply of loanable funds curve SLF₀. What happens if disposable income decreases?

• A)Nothing; the economy would remain at point A.
• B)There is a movement to a point such as B on the supply of loanable funds curve SLF₀.
• C)The supply of loanable funds curve shifts rightward to a curve such as SLF₂.
• D)The supply of loanable funds curve shifts leftward to a curve such as SLF₁.
• E)The supply of loanable funds curve becomes downward sloping.

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Definitions:

Free Trade

The unrestricted buying and selling of goods and services between countries without the imposition of tariffs, quotas, or other restrictions.

Domestic Producers

Companies or individuals that manufacture or produce goods and services within their home country, as opposed to importing them from abroad.

Tariffs and Quotas

These are trade policies where tariffs are taxes on imported goods, and quotas are limits on the amount of a good that can be imported.

Import Substitution

An economic policy aimed at replacing foreign imports with domestic production to promote local industries.