What Happens to the Demand for Loanable Funds Curve When

question 258

Multiple Choice

What happens to the demand for loanable funds curve when the economy enters a recession?

• A) The demand for loanable funds curve shifts rightward because the real interest rate falls.
• B) The demand for loanable funds curve shifts leftward because the real interest rate falls.
• C) The demand for loanable funds curve shifts rightward because the expected rate of profit falls.
• D) The demand for loanable funds curve shifts leftward because the expected rate of profit falls.
• E) The demand for loanable funds curve shifts leftward because the purchasing power of wealth decreases.

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Definitions:

Consistent

In a logical sense, a set of statements is consistent if they can all be true at the same time; more generally, acting or done in the same way over time.

Truth Tables

A table used in logic to determine the truth value of a compound statement based on the truth values of its components.

Symbolic Form

Representation of logical statements or arguments using symbols and operators to abstract away from the content, focusing on structure.

Components

The individual parts or elements that make up a complex system or device.