TRUE/ FALSE

1) If market participants expect higher inflation in the future, the quantity of loanable funds demanded will increase. This will cause a movement along the demand function for loanable funds.

2) If market participants expect higher inflation in the future, the quantity of loanable funds supplied will increase. This will cause a movement along the supply function for loanable funds.

3) If the nominal interest rate increases, the quantity of loanable funds demanded will increase. This will cause a movement along the demand function for loanable funds.

4) If the nominal interest rate decreases, the quantity of loanable funds supplied will increase. This will cause a shift in supply function for loanable funds.

5) If firms and households expect better economic conditions in the future, demand for loanable funds will shift to the right.

6) If credit risk increases, supply of loanable funds will shift to the right.