Question

First Cline, wapore compo mon Perearis per s to build a factory on cost $8 won if there inter e s percent year, a larger factory that is 10 millioner el percent year, ora Fin Calexpects profitto crush n ya Explow his decrease in expected protece First Cars demand for anable lunds This decrease in expected pro te demand for anbefunds and brings the demand for table de curve OA researward of O decreases have long and hard shito 30. decewa OD. decrease movementong

Answer 1

The right answer is C because the decrease in expected profit will decrease the demand for loanable funds and shifts the demand curve for loanable funds to the left. As expected profit is positively related to the demand for loanable funds and firms demand for loanable funds depends on the expected profit.