Question : 31) What happens to the demand for loanable funds curve : 1238002

31) 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 expected profit falls.

D) The demand for loanable funds curve shifts leftward because expected profit falls.

E) The demand for loanable funds curve shifts leftward because wealth decreases.

32) The demand for loanable funds curve shifts rightward when

A) the real interest rate rises.

B) the real interest rate falls.

C) expected profit increases.

D) expected profit decreases.

E) wealth rises.

33) When the expected profit ________, investment demand ________ and the demand for loanable funds curve shifts ________.

A) falls; decreases; leftward

B) rises; increases; leftward

C) falls; decreases; rightward

D) rises; decreases; rightward

E) falls; increases; rightward

34) An increase in the expected profit from new capital brings about a

A) movement up along the demand for loanable funds curve.

B) movement down along the demand for loanable funds curve.

C) rightward shift of the demand for loanable funds curve.

D) leftward shift of the demand for loanable funds curve.

E) rightward shift of the supply of loanable funds curve.

35) Which of the following occurs if the expected profit increases?

A) Investment demand increases and the demand for loanable funds curve shifts rightward.

B) Investment demand decreases and the demand for loanable funds curve shifts leftward.

C) The quantity of investment demanded increases and there is a movement down along the demand for loanable funds curve.

D) The quantity of investment demanded decreases and there is a movement up along the demand for loanable funds curve.

E) The savings increases and the supply of loanable funds curve shifts rightward.

36) If firms became more optimistic about the future of the economy, which of the following occurs?

A) Investment demand increases, and the demand for loanable funds curve shifts rightward.

B) Investment demand decreases, and the demand for loanable funds curve shifts leftward.

C) The quantity of investment demanded increases, and there is a movement down along the demand for loanable funds curve.

D) The quantity of investment demanded decreases, and there is a movement up along the demand for loanable funds curve.

E) The saving decreases, and the supply of loanable funds curve shifts leftward.

37) In the figure above, the rightward shift from the demand for loanable funds curve DLF1 to the demand for loanable funds curve DLF2, could be the result of

A) a rise in the interest rate.

B) an increase in wealth.

C) an increase in expected profit.

D) a decrease in expected profit.

E) a fall in the interest rate.

38) In the figure above, the shift from DLF1 to DLF2 could result from

A) the economy entering a strong expansion.

B) an increase in the nominal interest rate.

C) a decrease in the real interest rate.

D) an increase in a government budget surplus.

E) the economy entering a recession.

39) In the figure above, the leftward shift from the demand for loanable funds curve DLF1 to the demand for loanable funds curve DLF3, could be the result of

A) a decrease in interest rates during an economic recession.

B) an increase in interest rates during an economic expansion.

C) the economy entering a recession.

D) a government budget surplus.

E) the economy entering an expansion.

40) In the figure above, the leftward shift from the demand for loanable funds curve DLF1 to the demand for loanable funds curve DLF3, could be the result of

A) a fall in the interest rate.

B) a decrease in expected profit.

C) an advancement in technology.

D) an increase in the population.

E) a rise in the interest rate.