QUESTION 7Use the following diagram to answer this questionThe accompanying graph shows the market for loanable funds in equilibrium.Interestrate (%)121086420SEX2D3465Quantity of loanable funds(trillions of dollars)Which of the following might produce a new equilibrium interest rate of 2% and a new equilibrium quantity of loanable funds of $1 trillion?OA. Consumers have increased consumption as a fraction of disposable income.OB. Businesses have become more pessimistic about the future and, as result; they plan to cut back on their spending.OC. The federal government has a budget surplus rather than a budget deficit.OD. The federal government has a budget deficit rather than a budget surplus.uhmit. Click Save All Answers to save all answers.

The equilibrium interest rate is determined where the demand and supply of loanable funds are equal.

Answered: se the following diagram to answer this…

se the following diagram to answer this question he accompanying graph shows the market for loanable funds in equilibrium. Interest rate (%) 12 10 8 6 4 2 E חח S D 4

ENGR.ECONOMIC ANALYSIS

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Chapter1: Making Economics Decisions

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