Use the Following to Answer Question(s): Loanable Funds and Capital

question 130

Multiple Choice

Use the following to answer question(s) : Loanable Funds and Capital Markets

-(Exhibit: Loanable Funds and Capital Markets) A decrease in the demand for capital, as shown in Panel (b) as a movement from D₂ to D₁, will lead to:

• A) the movement from D₁ to D₂ in Panel (a).
• B) the movement from D₂ to D₁ in Panel (a).
• C) a decrease in the quantity of capital demanded, as shown in Panel (d) when the interest rate rises from r₁ to r₂.
• D) none of the above.

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