In a business cycle recession, which of the following occurs?
A) The quantity of investment demanded increases and there is a movement down along the demand for loanable funds curve but no shift in the curve.
B) Investment demand increases and the demand for loanable funds curve shifts rightward.
C) Investment demand decreases and the demand for loanable funds curve shifts leftward.
D) The quantity of investment demanded decreases and there is a rightward shift of the demand for loanable funds curve.
E) The quantity of investment demanded decreases increases and there is a movement up along the demand for loanable funds curve but no shift in the curve.
C
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If there is a decrease in the expected future profitability of capital,
A) the aggregate demand curve will shift right. B) the aggregate demand curve will shift left. C) the aggregate demand curve will become steeper. D) the aggregate demand curve will be unaffected.
Suppose U.S. consumers start buying more English shoes and fewer U.S. shoes. What impact will this trend have on the foreign exchange market?
a. U.S. demand for foreign exchange, in general, and British pounds, in particular, will increase. b. U.S. demand for foreign exchange, in general, and British pounds, in particular, will decrease. c. U.S. demand for British pounds will increase, but the demand for foreign exchange will probably decrease. d. U.S. demand for British pounds will decrease, but the demand for foreign exchange will probably increase. e. There is no effect on foreign exchange.