All else being equal,the demand curve for loanable funds may shift to the right (increase)as a result of:
A) a fall in the supply of loanable funds.
B) expectations of a forthcoming recession.
C) technological improvements.
D) a fall in business prospects.

Question

Quizplus · Accepted Answer

Technological improvements increase the productivity and profitability of firms, making them more likely to seek funding for investment. This increases the demand for loanable funds, resulting in a rightward shift of the demand curve.

Note: A fall in the supply of loanable funds (choice A) would shift the demand curve to the left, while expectations of a forthcoming recession (choice B) and a fall in business prospects (choice D) would reduce demand for loanable funds, resulting in leftward shifts of the demand curve.

All Else Being Equal,the Demand Curve for Loanable Funds May