Figure 23.2.5 -Refer to Figure 23.2.5. in Figure 23.2.5, the Initial Supply

Multiple Choice

Figure 23.2.5

-Refer to Figure 23.2.5. In Figure 23.2.5, 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

A) shifts the supply of loanable funds curve rightward to curve SLF₁ and does not shift the demand for loanable funds curve.
B) shifts the supply of loanable funds curve rightward to curve SLF₁, and shifts the demand for loanable funds curve rightward to curve DLF₁.
C) shifts the demand for loanable funds curve rightward to curve DLF₁ and does not shift the supply of loanable funds curve.
D) has no effect on either the demand for loanable funds curve or the supply of loanable funds curve.
E) increases the inflation rate.