Greater optimism about the expected profits from investment projects A. shifts the demand for loanable funds curve leftward. B. causes a movement upward along the demand for loanable funds curve. C. causes a movement downward along the demand for loanable funds curve. D. shifts the demand for loanable funds curve rightward.

Option (D) is correct.

Explanation:

When there is a greater optimism in the investors about the future profits from  various investment projects then this will induces investors to invest more on these projects.

Hence, there is a need of more loanable funds and the demand for loanable funds increases. This will shift the demand curve for loanable funds rightwards. All the investors in the market wants to earn more profits in the future. This would also increases the interest rate on borrowings, because of the higher demand for loanable funds.

due to the changes the federal reserve is making the unused reserves will impact the economy by them facing inflation. inflation is definfed as the increase in pricing of a good or service but the decline of the value of money used for purchasing those items. when the economy has a high inflation rate, they are subject to money loss and hurt on the economy.

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