Draw a graph to illustrate the effect of a decrease in the demand for loanable funds and a smaller decrease in the supply of loanable funds on the real interest rate and the equilibrium quantity of loanable funds. Draw a demand for loanable funds curve. Label it DLF Draw a supply of loanable funds curve. Label it SLF Draw a point at the equilibrium real interest rate and quantity of loanable funds. Label it 1. Draw a curve that shows a decrease in the demand for loanable funds. Label it DLF,. Draw a curve that shows a smaller decrease in the supply of loanable funds. Label it SLF₁. Draw a point at the new equilibrium real interest rate and quantity of loanable funds. Label it 2. KIDS 12.0 10.0 8.0 6.0 40- 2.0 Real interest rate (percent per year) 0.0+ 0.0 5.0 Q Q 1.0 2.0 3.0 4.0 Loanable funds (trillions of 2012 dollars) >>> Draw only the objects specified in the question. G
Draw a graph to illustrate the effect of a decrease in the demand for loanable funds and a smaller decrease in the supply of loanable funds on the real interest rate and the equilibrium quantity of loanable funds. Draw a demand for loanable funds curve. Label it DLF Draw a supply of loanable funds curve. Label it SLF Draw a point at the equilibrium real interest rate and quantity of loanable funds. Label it 1. Draw a curve that shows a decrease in the demand for loanable funds. Label it DLF,. Draw a curve that shows a smaller decrease in the supply of loanable funds. Label it SLF₁. Draw a point at the new equilibrium real interest rate and quantity of loanable funds. Label it 2. KIDS 12.0 10.0 8.0 6.0 40- 2.0 Real interest rate (percent per year) 0.0+ 0.0 5.0 Q Q 1.0 2.0 3.0 4.0 Loanable funds (trillions of 2012 dollars) >>> Draw only the objects specified in the question. G
Chapter9: Classical Macro Economics And The Self Regulating Economy
Section: Chapter Questions
Problem 4QP
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