Show how an increase in the supply of loanable funds and a decrease in thedemand for loanable funds can lower the real interest rate and leave theReal interest rate (percent per year)12-equilibrium quantity of loanable funds unchanged.10-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 1.8-6-Draw a curve that shows a decrease in the demand for loanable funds. Label itDLF,.Draw a curve that shows an increase in the supply of loanable funds. Draw it insuch a way that the equilibrium quantity of loanable funds does not change. Labelit SLF,.4-2-Draw a point at the new equilibrium real interest rate and quantity of loanablefunds. Label it 2.0-Loanable funds (trillions of 2007 dollars)>>> Draw only the objects specified in the question.

The following curves are drawn below:

Show how an increase in the supply of loanable funds and a decrease in the demand for loanable funds can lower the real interest rate and leave the equilibrium quantity of loanable funds unchanged. 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 an increase in the supply of loanable funds. Draw it in such a way that the equilibrium quantity of loanable funds does not change. Label it SLF,. Draw a point at the new equilibrium real interest rate and quantity of loanable funds. Label it 2.

Show how an increase in the supply of loanable funds and a decrease in the demand for loanable funds can lower the real interest rate and leave the equilibrium quantity of loanable funds unchanged. 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 an increase in the supply of loanable funds. Draw it in such a way that the equilibrium quantity of loanable funds does not change. Label it SLF,. Draw a point at the new equilibrium real interest rate and quantity of loanable funds. Label it 2.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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According to how we model the Loanable Funds market in Ch. 6 (considering household savings and taking (T – G) as government’s net ‘saving,’ which could be negative it there were a budget deficit), which of the following shifts the Supply of Loanable Funds curve to the left? (T = taxes; G = government spending.) Group of answer choices A) higher tax rates on business investment spending B) a change in tastes toward consuming less C) higher budget deficit D) change in tastes toward saving more E) lower budget deficit
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