Suppose firms become more optimistic about the economy's ability ...

[Alainaaa8]

Suppose firms become more optimistic about the economy's ability to avoid a recession and hence the expected profit increases. As a result, the demand for loanable funds curve shifts ________ and the real interest rate ________.
 
  A) leftward; rises
  B) rightward; rises
  C) rightward; does not change
  D) leftward; falls
  E) rightward; falls

Question 2

According to Okun's Law, if the unemployment rate is 7 percent and the natural unemployment rate is 5 percent, potential GDP is ________ than real GDP.
 
  A) 2 percent greater
  B) 7 percent less
  C) 2 percent less
  D) 4 percent less
  E) 4 percent greater

[pikon]

Answer to Question 1

B

Answer to Question 2

D

[Alainaaa8]

TYSM

[adammoses97]

Excellent