Changes in the money supply affect the interest rate through changes in the supply of loans, Real GDP, the price level, and the expected inflation rate. True or False: The expectations effect describes a change in the interest rate due to a change in the price level. INTEREST RATE True False The following graph shows the supply and demand curves in the market for loanable funds. Consider an increase in the price level. INTEREST RATE Adjust the following graph to show the effect of this increase in the price level. The income effect QUANTITY OF LOANABLE FUNDS The price-level effect a. The liquidity effect PU The expectations effect RU 10 DE 19 SLF Which of the following refer to changes that affect both supply and demand in the loanable funds market? Check all that apply. (?) DLF SUF

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