-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 government budget surplus.
B) the economy entering an expansion.
C) an increase in interest rates during an economic expansion.
D) the economy entering a recession.
E) a decrease in interest rates during an economic recession.

Question

-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 government budget surplus. 
B) the economy entering an expansion. 
C) an increase in interest rates during an economic expansion. 
D) the economy entering a recession. 
E) a decrease in interest rates during an economic recession.

Quizplus · Accepted Answer

The leftward shift from DLF₁ to DLF₃ in the demand for loanable funds curve could be the result of the economy entering a recession. During a recession, businesses and consumers are less likely to borrow money for investment or spending, leading to a decrease in the demand for loanable funds.

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