-In the figure above, the shift from DLF₁ to DLF₂ could result from
A) the economy entering a strong expansion.
B) the economy entering a recession.
C) a decrease in the real interest rate.
D) an increase in a government budget surplus.
E) an increase in the nominal interest rate.

Question

-In the figure above, the shift from DLF₁ to DLF₂ could result from
A) the economy entering a strong expansion. 
B) the economy entering a recession. 
C) a decrease in the real interest rate. 
D) an increase in a government budget surplus. 
E) an increase in the nominal interest rate.

Quizplus · Accepted Answer

A shift from DLF₁ to DLF₂ indicates an increase in the demand for loanable funds, which is consistent with a strong economic expansion where businesses and consumers are more likely to borrow for investment and consumption.

-In the Figure Above, the Shift from DLF₁ to DLF₂