First Call, Inc., a smartphone company, plans to build a factory-one that costs $14 million if the real interest rate is 4 percent a year, a larger factory that costs $16 million if the real interest rate is 3 percent a year, or a smaller one that costs $12 million if the real interest rate is 5 percent a year. First Call expects its profit to crash next year. Explain how this decrease in expected profit influence First Call's demand for loanable funds. This decrease in expected profit the demand for loanable funds and brings the demand for loanable funds curve. O A. decreases; a leftward shift of O B. decreases; a movement along O C. increases; a rightward shift of O D. decreases; both a movement along and a leftward shift of
First Call, Inc., a smartphone company, plans to build a factory-one that costs $14 million if the real interest rate is 4 percent a year, a larger factory that costs $16 million if the real interest rate is 3 percent a year, or a smaller one that costs $12 million if the real interest rate is 5 percent a year. First Call expects its profit to crash next year. Explain how this decrease in expected profit influence First Call's demand for loanable funds. This decrease in expected profit the demand for loanable funds and brings the demand for loanable funds curve. O A. decreases; a leftward shift of O B. decreases; a movement along O C. increases; a rightward shift of O D. decreases; both a movement along and a leftward shift of
Chapter21: Financial Markets, Saving, And Investment
Section: Chapter Questions
Problem 9P
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Transcribed Image Text:First Call, Inc., a smartphone company, plans to build a factory-one that costs $14 million if the real interest rate is 4 percent a year, a larger factory that costs $16 million if the real interest rate is 3 percent a year, or a smaller
one that costs $12 million if the real interest rate is 5 percent a year.
First Call expects its profit to crash next year.
Explain how this decrease in expected profit influence First Call's demand for loanable funds.
This decrease in expected profit
the demand for loanable funds and brings
the demand for loanable funds curve.
O A. decreases; a leftward shift of
O B. decreases; a movement along
O C. increases; a rightward shift of
O D. decreases; both a movement along and a leftward shift of
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