Figure 23.2.4 -In Figure 23.2.4, the Economy Is at Point a on at Point

Multiple Choice

Figure 23.2.4

-In Figure 23.2.4, the economy is at point A on the supply of loanable funds curve SLF₀. What happens if the real interest rate rises?

A) Nothing; the economy would remain at point A.
B) There is a movement to a point such as B on the supply of loanable funds curve SLF₀.
C) The supply of loanable funds curve shifts rightward to a curve such as SLF₂.
D) The supply of loanable funds curve shifts leftward to a curve such as SLF₁.
E) The supply of loanable funds curve becomes steeper.