In the above figure, the initial supply of loanable funds curve is SLF0 and the initial demand for loanable funds curve is DLF0. An increase in the expected profit would
A) only shift the supply of loanable funds curve rightward to a curve such as SLF1.
B) shift the supply of loanable funds curve rightward to a curve such as SLF1, and shift the demand for loanable funds curve rightward to a curve such as DLF1.
C) only shift the demand for loanable funds curve rightward to a curve such as DLF1.
D) have no effect on either the demand for loanable funds curve or the supply of loanable funds curve.
C
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The equation of exchange states that:
a. money supply multiplied by real output equals velocity. b. velocity multiplied by money supply equals the selling price times the quantity of actual output. c. money supply divided by velocity equals nominal GDP. d. money supply divided by velocity equals real GDP.
Answer the following questions true (T) or false (F)
1. In a market with positive externalities, the market equilibrium price will be less than the efficient equilibrium price. 2. Health insurance companies impose deductibles on policies and co-payments on claims to reduce the problem of adverse selection. 3. Adverse selection is a situation in which one party to an economic transaction has less information than the other party.