1. The following are correct statements about the Supply of loanable funds, EXCEPT:



A. It is mainly determined by the marginal cost and marginal benefit of savings.


B. The Marginal cost per dollar supplied is related to the forgone benefit of current consumption.


C. The Supply Curve for Loanable Funds will shift Up if inflation increases


D. Positive economic expectations will decrease the supply of loanable funds (shift up)


2. Assuming a situation where the economy has negative economic expectations about the future, then the following are likely effects taking place in the market for loanable funds, EXCEPT:



A. A contraction of the supply for loanable funds (Shift Up)


B. A contraction of the demand for loanable funds (Shift Up)


C. A decline in real interest rates in equilibrium.


D. A decline in nominal and real interest rates, assuming no change in expected inflation rates.

Thanks in advance.