Figure 26-4

question 354

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. Regard the position of the Supply curve as fixed, as on the graph. If the real interest rate is 4 percent, the inflation rate is 2 percent, and the market for loanable funds is in equilibrium, then the position of the demand-for-loanable-funds curve must be

• A) D₁.
• B) D₂.
• C) between D₁ and D₂.
• D) to the left of D₁.

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