-In the Figure Above, the Rightward Shift from the Demand

question 31

Multiple Choice

-In the figure above, the rightward shift from the demand for loanable funds curve DLF₁ to the demand for loanable funds curve DLF₂, could be the result of

• A) a rise in the interest rate.
• B) a fall in the interest rate.
• C) a decrease in expected profit.
• D) an increase in expected profit.
• E) an increase in wealth.

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Definitions:

Equilibria

The state of balance in a market or other system where supply and demand are matched, and there is no tendency to change.

Dominant Strategies

In game theory, a strategy that is the best choice for a player, regardless of what the opposing player chooses.

Annual Profit

Annual profit is the financial gain a company or individual achieves in a fiscal year after all expenses, taxes, and costs have been subtracted from total revenue.

Dominant-Strategy Equilibrium

A situation in game theory where a specific strategy is best for a player, regardless of the strategies chosen by other players.