As the economy enters an expansion so that people's expected future incomes rise, there will be
A) a decrease in the nominal interest rate.
B) a leftward shift in the supply of loanable funds curve.
C) an increase in the supply of loanable funds.
D) a leftward shift in the demand for loanable funds curve.
E) None of the above answers is correct.
C
You might also like to view...
Is it possible for an equilibrium that is consistent with purely competitive conditions to arise in an industry with positive scale economies? If so, explain how this could happen. If not, why not?
What will be an ideal response?
Assume a firm produces 500 units of a good by using two inputs, capital and labor, whose per unit prices are $10 and $4
Assume also that the marginal physical product of the last unit of capital is 30 and the marginal physical product of the last unit of labor is 10. Is this firm minimizing its costs of producing 500 units of output? A) No, because the marginal products of the two inputs are not equal. B) No, because the MRTS and the price ratio for the two inputs are not equal. C) No, because the prices of the two inputs are not equal. D) The answer cannot be determined without more information.