-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) an increase in the population.
B) a rise in the interest rate.
C) a fall in the interest rate.
D) a decrease in expected profit.
E) an advancement in technology.

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) an increase in the population. 
B) a rise in the interest rate. 
C) a fall in the interest rate. 
D) a decrease in expected profit. 
E) an advancement in technology.

Quizplus · Accepted Answer

A leftward shift in the demand for loanable funds curve, from DLF₁ to DLF₃, could be caused by a decrease in expected profit. This is because if businesses expect lower profits from their investments, they would be less inclined to borrow money for investment purposes, leading to a decrease in the demand for loanable funds.

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