7. Refe r to Figure 26-3. A shift of the demand curve from D 1 to D 2 is called

Question

7. Refer to Figure 26-3. A shift of the demand curve from D1 to D2 is called

8. Refer to Figure 26-3. Which of the following movements shows the effects of the government

9. Refer to Figure 26-3. Which of the following movements shows the effects of households’ decision to save more?

Figure 26-3. The figure shows two demand-for-loanable-funds curves and two supply-of-loanable- funds curves. Di 5. Refer to Figure 26-3. What, specifically, does the label on the vertical axis, i, represent? a. the nominal interest rate b. the real interest rate c. the inflation rate d. the dividend yield Refer to Figure 26-3. A shift of the supply curve from S1 to S2 is called a. an increase in the supply of loanable funds. b. an increase in the quantity of loanable funds supplied. C. a decrease in the supply of loanable finds. 6.

Explanation / Answer

5. The vertical axis represents the nominal interest rates in the economy whereas the horizontal or 'Y' axis represents the quantity of loanable funds.

6. A shift of the supply curve from S1 to S2 or the leftward shift of the supply curve denotes decrease in the supply of loanable funds in the market.

7. A shift of the demand curve from D1 to D2 is called increase in the demand for loanable unds in the market.

8. Question not complete

9.A movement from point C to point F will show the decision of the households to save more in the economy. The households decision to save more in the financial system will lead to higher supply of loanable funds in the market.

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