(Figure: Loanable Funds Expansion) Which of the following reasons could cause the demand curve for loanable funds to shift to the right from DLF to D'LF in the figure? SLF 1₁ 10 Qo Q₂ DLF S'LF •D¹LF QLF The economy is expected to boom, thereby increasing investment returns. Rising interest rates make it more attractive for savers to save. Larger investment projects with potentially higher returns get funded. Falling interest rates make it less expensive for firms to borrow. ►

(Figure: Loanable Funds Expansion) Which of the following reasons could cause the demand curve for loanable funds to shift to the right from DLF to D'LF in the figure? SLF 1₁ 10 Qo Q₂ DLF S'LF •D¹LF QLF The economy is expected to boom, thereby increasing investment returns. Rising interest rates make it more attractive for savers to save. Larger investment projects with potentially higher returns get funded. Falling interest rates make it less expensive for firms to borrow. ►

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter21: Financial Markets, Saving, And Investment

Section: Chapter Questions

Problem 6P

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Similar questions

Explain why is it difficult to set aside funds for investment when you are in poverty.
Explain how decreased domestic investments that occur due to a budget deficit will affect future economic growth.
Use the analysis for the market for loanable funds diagrams to examine and explain both in words and diagrammatically how the following government policy affect the economy’s saving and investment. Policy 1 Suppose the government passed a tax reform giving an investment tax credit to any firm building a new factory or buying a new piece of equipment.
Use the analysis for the market for loanable funds diagram to illustrate and explain how the following government policy affects the economy’s saving and investment. Policy 1: Suppose the government starts with a balanced budget and then, because of a tax cut or spending increase, starts running a budget deficit.State, explain and draw the loanable funds diagram for i,ii and iii. (i) which which loanable funds curve would this policy affect?(ii) which way would the loanable funds curve shift?(iii) what would be the the impact on interest rates?