What Is the Effect of a Decrease in Expected Profit

question 16

Multiple Choice

What is the effect of a decrease in expected profit?

• A)The demand curve for loanable funds shifts leftward and the real interest rate falls.
• B)The supply curve of loanable funds shifts rightward and the nominal interest rate rises.
• C)A movement down along the demand curve for loanable funds occurs.
• D)The real interest rate rises as saving increases.
• E)The demand curve for loanable funds shifts rightward and the real interest rate rises.

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