-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) a fall in the interest rate.
C) a decrease in expected profit.
D) an increase in expected profit.
E) an increase in wealth.

Question

-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) a fall in the interest rate. 
C) a decrease in expected profit. 
D) an increase in expected profit. 
E) an increase in wealth.

Quizplus · Accepted Answer

An increase in expected profit would encourage more borrowing for investment, shifting the demand for loanable funds curve rightward from DLF₁ to DLF₂.

-In the Figure Above, the Rightward Shift from the Demand