Figure 62 Alt Text for Figure 6

question 148

Multiple Choice

Figure 6.2 Alt text for Figure 6.2: In figure 6.2, a graph comparing loanable funds and real interest rate.
Long description for Figure 6.2: The x-axis is labelled, loanable funds (billions of dollars per year) , with values L1 and L2 marked.The y-axis is labelled, real interest rate, with values i1 and i2 marked.3 lines are plotted; Demand D1, D2 and Supply.Line D2 begins at the top left corner and slopes down to the bottom centre.Line D1 follows the same slope as D2, but is plotted to the right.The Supply line begins near the origin and slopes up to the top right corner.The area between the lines D1 and D2 is indicated by a right pointing arrow.The Supply line intersects D1 at point A (L1, i1) , approximately 3 quarters of the way along both lines.The Supply line intersects D2 at point B (L2, i2) approximately 3 quarters of the way along both lines.Points A and B are connected to their respective coordinates on the x and y-axis with dotted lines.Between these dotted lines, an arrow points left, from L1 toward L2.and another arrow points down, from i1 toward i2.
-Refer to Figure 6.2.Which of the following is consistent with the graph depicted above?

• A)An expected expansion increases the profitability of new investment.
• B)The government runs a budget surplus.
• C)There is a shift from an income tax to a consumption tax.
• D)New government regulations decrease the profitability of new investment.
• E)Households save more of their incomes (spend less).

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