Figure 26-4

question 343

Multiple Choice

Figure 26-4. On the horizontal axis of the graph, L represents the quantity of loanable funds in billions of dollars.
-Refer to Figure 26-4. Which of the following events could explain a shift of the demand-for-loanable-funds curve from D₁ to D₂?

• A) The tax code is reformed to encourage greater saving.
• B) The tax code is reformed to encourage greater investment.
• C) The government starts running a budget deficit.
• D) The government starts running a budget surplus.

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Definitions:

Adolescence

Describes the transitional stage of physical and psychological development that typically occurs between childhood and adulthood, characterized by significant changes in body, identity, and social relationships.

Unemployment

The condition of being jobless and actively seeking work, representing a measure of the health of an economy.

Conscientiousness

A personality trait characterized by thoroughness, caution, and the tendency to strive for achievement, self-discipline, and dutifulness.

Motivational Trait

Personal characteristics that influence an individual’s tendency to pursue goals with energy and persistence.