Figure 23.2.1 -Refer to Figure 23.2.1. in Figure 23.2.1, the Economy Is

Multiple Choice

Figure 23.2.1

-Refer to Figure 23.2.1. In Figure 23.2.1, the economy is at point A on the initial demand for loanable funds curve DLF₀. What happens if the real interest rate rises?

A) There is a movement to a point such as B on the demand for loanable funds curve DLF₀.
B) The demand for loanable funds curve shifts rightward to curve DLF₂.
C) The demand for loanable funds curve shifts leftward to curve DLF₁.
D) Either A or B can occur.
E) Either A or C can occur.