Figure 26-4

Multiple Choice

Figure 26-4.On the horizontal axis of the graph,L represents the quantity of loanable funds in billions of dollars.
-Refer to Figure 26-4.Regard the position of the Supply curve as fixed,as on the graph.If the real interest rate is 4 percent,the inflation rate is 2 percent,and the market for loanable funds is in equilibrium,then the position of the demand-for-loanable-funds curve must be

A) D₁ .
B) D₂ .
C) between D₁ and D₂ .
D) to the left of D₁.